Apparently you didn't read the article because, in part, the decision was based on it.
I understand your supply and demand argument, but the underlying conundrum is that they are "encouraging" consumers to use less electricity or else pay a higher rate.
Not to mention the states rights issue.
I did read the article. I saw where environmental groups made the claim, but I don't see that in the article as part of the decision. Would you point out the text you claim I missed?
Demand shaving is a very normal part of a healthy grid. We do it internally in industrial facilities as well as out on the grid. If you don't, you end up with great expense building out generation and distribution facilities designed for a peak a few hours a year that easily could have been reduced.
Just for background, I'm an electrical engineer, specialized in power system. I now normally work in oil, gas or petrochem facilities but started in the electric utility world.