Federal Energy Regulatory Commission

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The Federal Energy Regulatory Commission (FERC) is the United States federal agency with jurisdiction over interstate electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. FERC also reviews and authorizes liquefied natural gas (LNG) terminals, interstate natural gas pipelines and non-federal hydropower projects.



A predecessor agency, the Federal Power Commission, was founded in 1920 to allow cabinet members to coordinate federal hydropower development.

In 1935, the FPC was transformed into an independent regulatory agency with five members nominated by the President and confirmed by the Senate. At that time the FPC regulated both hydropower and interstate electricity.

In 1938, the Natural Gas Act gave FPC jurisdiction over interstate natural gas pipelines and wholesale sales. In 1942, this jurisdiction was expanded to cover the licensing of more natural gas facilities. In 1954, the Supreme Court decision in Phillips v. Wisconsin extended FPC jurisdicition over all wellhead sales of natural gas in interstate commerce.

In response to an energy crisis, Congress passed the DOE Organization Act in 1977, which consolidated various energy-related agencies into a Department of Energy. Congress insisted that a separate independent regulatory body be retained, and the FPC was renamed the Federal Energy Regulatory Commission, preserving its independent status "within" the Department.[1] FERC was also given added responsibility to hear appeals of DOE oil price control determinations and to conduct all "on the record" hearings for DOE.[2] As a result, DOE does not have any administrative law judges. As a further protection, when DOE proposes a rulemaking, it must refer the proposal to FERC, and FERC can take over the proceeding if FERC determines that the rulemaking "may significantly affect" matters in its jurisdiction.[3] The DOE Act also transferred the regulation of interstate oil pipelines from the Interstate Commerce Commission to FERC.[4] However, the FERC lost some jurisdiction over the imports and exports of gas and electricity.

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