- ABA Groups
- Resources for Lawyers
- Career Center
- About Us
Demand for energy continues to grow, and the cost of producing and delivering electricity, natural gas and oil to consumers is increasing. As a result, energy practice is growing, and more new lawyers will come into contact with the Federal Energy Regulatory Commission (FERC). This article gives a broad overview of FERC and its regulatory authority.
What is FERC?
FERC is the federal agency generally charged with regulating electric and natural gas utilities and oil pipelines operating in interstate commerce, and with issuing licenses and certificates for hydroelectric facilities and natural gas pipelines. FERC is an independent regulatory agency under the Department of Energy.
What FERC Regulates.
What FERC Does Not Regulate .
While FERC has broad ranging regulatory authority, it is important to note the areas where FERC does not have jurisdiction. In particular, FERC does not act in several areas left to state regulation, including: retail rates charged to end users of electricity and natural gas; directing or approving the construction of electric generation, transmission or distribution facilities; approving the location of such facilities (except in limited circumstances with regard to electric transmission facilities), and; regulation of local distribution pipelines. FERC also does not have jurisdiction over the rates, terms and conditions of service provided by federal power marketing agencies, municipal or governmentally-owned utilities, and many rural electric cooperatives. Additionally, FERC does not act in matters of pipeline safety, nor does it regulate nuclear generating facilities, except with regard to the rates for wholesale power sold from such plants.
Organization of FERC.
FERC is composed of five Commissioners who are appointed by the President and confirmed by the Senate. Commissioners serve a five-year term, and no more than three sitting Commissioners may be from the same political party. Each Commissioner has one equal vote. One Commissioner is designated as Chair by the President. FERC's staff is divided into several functional offices, including:
State Public Utility or Public Service Commissions.
Each state has a public utility or public service commission that exercises state regulatory jurisdiction in energy matters not regulated by FERC ( e.g., New York Public Service Commission). Among other things, most state commissions regulate the retail rates for electricity and natural gas charged to end users (such as homes and businesses), and approve the siting of generation, transmission and distribution facilities.
About the Author
Jeffery S. Dennis is an attorney with the Federal Energy Regulatory Commission. The views expressed here are solely those of the author and do not necessarily represent the views of the Federal Energy Regulatory Commission or the United States.