Federal Energy Regulatory Commission (FERC)


The Federal Energy Regulatory Commission (FERC) is an independent agency of the United States government that regulates the interstate transmission of electricity, natural gas, and oil. FERC also reviews proposals to build liquefied natural gas (LNG) terminals and interstate natural gas pipelines as well as licensing hydropower projects.

The Energy Policy Act of 2005 gave FERC additional responsibilities, including the following: (1) regulating the transmission and wholesale sale of electricity in interstate commerce; (2) reviewing certain mergers and acquisitions and corporate transactions by electricity companies; (3) regulating the transportation of oil by pipeline in interstate commerce; (4) approving the siting of interstate natural gas pipelines and storage facilities; (5) reviewing the siting application for electric transmission projects (under limited circumstances); and (6) protecting the reliability of the high voltage interstate transmission through the enforcement of mandatory reliability standards.

Many areas outside of FERC’s jurisdictional responsibility are dealt with by State Public Utility Commissions. Areas considered outside of FERC’s responsibility include: (1) Regulation of retail electricity and natural gas sales to consumers; (2) Approval for the physical construction of electric generation facilities; (3) Regulation of activities of the municipal power systems, federal power marketing agencies, and most rural electric cooperatives; (4) Regulation of nuclear power plants by the Nuclear Regulatory Commission; (5) Issuance of State Water Quality Certificates; (6) Oversight for the construction of oil pipelines; (7) Regulation of local distribution pipelines of natural gas; (8) Reliability problems related to failures of local distribution facilities; and (9) Tree trimmings near local distribution power lines in residential neighborhoods.