Will the Supreme Court kill the smart grid?

On April 30, Tesla’s Elon Musk took the stage in California to introduce the company’s Powerwall battery energy storage system, which he hopes will revolutionize the dormant market for household and utility-scale batteries.

A few days later, the Supreme Court announced that it would hear a case during its fall term that could very well determine whether Tesla’s technology gamble succeeds or fails. Justices will hear arguments on October 14 to address questions having to do with federal jurisdiction over the fast-changing electricity business.

At issue is an obscure federal policy known in the dry language of the electricity business as “Order 745,” which a lower court vacated last year.

Order 745 allowed electricity customers to be paid for reducing electricity usage from the grid – a practice known as “demand response.” It also stipulated that demand response customers would be paid the market price for not using the grid – like the power industry’s version of paying farmers not to grow corn.

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