FERC

The Federal Energy Regulatory Commission (FERC) is an independent federal agency that regulates the interstate aspects of the U.S. energy markets. Its responsibilities include regulating the transmission and wholesale sale of electricity, the transportation of natural gas, and the licensing of hydropower projects. FERC also reviews the siting of interstate oil pipelines and LNG facilities, and approves rates and terms for interstate energy activities. The agency plays a key role in maintaining grid reliability, promoting competitive markets, and protecting consumer interests in energy transactions.

FERC traces its origins to the Federal Power Commission, established in 1920 to oversee hydroelectric development and interstate power and gas. It was renamed the Federal Energy Regulatory Commission in 1977 under the Department of Energy Organization Act, as part of a reorganization that integrated energy regulatory responsibilities into a standalone commission.

The commission consists of five commissioners appointed by the president and confirmed by the Senate; no more than three may belong to the same political party. Commissioners serve fixed terms, and one is designated chair. FERC operates independently of the executive departments, but coordinates with other agencies, state regulators, and regional market bodies.

Key functions include overseeing interstate electricity markets and transmission rates, certifying natural gas pipelines, and licensing hydroelectric projects. It also administers energy imports and exports, reviews mergers in the energy sector, and enforces compliance with tariffs and reliability standards. FERC recognizes the North American Electric Reliability Corporation (NERC) as the Electric Reliability Organization and oversees the development and enforcement of reliability standards. State public utility commissions regulate retail energy rates and local distribution, while FERC governs interstate matters and wholesale markets.