Supreme Court seems troubled over energy pricing rule

The Supreme Court seems troubled by a federal regulation backed by environmental groups that requires utilities to pay electric customers who save energy during times of peak demand.

The justices heard arguments Wednesday over whether the Federal Energy Regulatory Commission overstepped its authority when it adopted the program, known as "demand response." This type of program is meant to encourage efficiency, promote clean energy, and reduce blackouts.

The Obama administration and other supporters of the rule say it has helped consumers save billions in energy costs, improved reliability of the power grid and helped reduce air pollution since it was put in place in 2011. But a federal appeals court ruled 2-1 last year that it intrudes on state power over retail electricity sales.

Power generators oppose the rule because it impacts their ability to charge higher prices at peak times. They also argue this program is federal rules is something that should be handled by the states.

Consumer groups argues that if the federal rule is thrown out, consumers could face higher prices and less reliability.

Several justices seemed concerned that the program has too much of an impact on retail rates.

A decision is expected in June. The program remains in effect until a final decision is made.

CBS News' Paula Reid contributed to this report.