EnerNOC Inc. shares were up 65 percent in midday trading after the US Supreme Court issued a ruling that would greatly benefit its energy conservation business.
The Boston-based company helps large industrial energy consumers curtail use in return for payments from power-grid operators and ultimately other customers. The Supreme Court upheld a ruling by US Federal Energy Regulatory Commission that allowed large users to be paid for conserving power, what’s known as demand response. Electricity suppliers had challenged the ruling, arguing the commission exceeded its authority.
The court decision paves the way for growth in the kind of energy conservation services offered by EnerNOC. Its shares were up $2.68, to $6.84 at 1:20 p.m.
“This case has been an overhang for the industry of demand response for a number of years, so to have a final resolution at the highest court in the land is a huge victory,” David Brewster, president and co-founder of EnerNOC, said in a phone call.
Demand response allows payments to industrial users who switch off lights or air conditioning when energy is most needed. The rule is designed to help grid operators avoid blackouts.
Payments to industrial consumers in the mid-Atlantic wholesale power market, the largest market for demand response, have totaled more than $144 million since 2002, according to data from PJM Interconnection LLC, which manages the system.
“Certainty and continuity are important in markets,” PJM said Monday in a statement. “Demand response brings value to competitive wholesale markets and is a vital component of electric system reliability.”
Environmental groups say demand response eliminates the need to build new power plants and reduces emissions blamed for global warming.
“Demand response provides tremendous benefits to our environment, helps consumers save money and makes our electricity grid more reliable,” the environmental group EarthJustice said Monday in a statement.
U.S. power producers that sell into competitive markets such would have benefited if the rule were eliminated. Share of some of those companies were down in trading Monday.