What is FERC (Federal Energy Regulatory Commission)?
The Federal Energy Regulatory Commission (FERC) is an independent agency of the United States government that regulates the transmission and wholesale sale of electricity and natural gas in interstate commerce and regulates the transportation of oil by pipeline in interstate commerce. FERC is responsible for overseeing and ensuring the reliability and security of the nation’s energy infrastructure, including electricity, natural gas, and hydropower projects. Established in 1977, FERC plays a crucial role in shaping energy policy and ensuring fair and efficient energy markets.
Key Responsibilities of FERC
Regulation of Electric Utilities
FERC regulates the transmission and wholesale sales of electricity in interstate commerce. It oversees the rates and services of electric utilities to ensure that they are just and reasonable, promoting fair competition and preventing discriminatory practices.
Natural Gas Regulation
FERC regulates the interstate transmission and sale of natural gas. This includes approving the construction and operation of natural gas pipelines, storage facilities, and liquefied natural gas (LNG) terminals, as well as setting rates for natural gas transportation.
Hydropower Licensing
FERC is responsible for licensing and inspecting non-federal hydropower projects. The commission ensures that these projects are safe, environmentally sound, and in the public interest, balancing energy development with environmental protection.
Oil Pipeline Regulation
FERC regulates the transportation of oil by pipeline in interstate commerce. This involves setting rates and terms of service to ensure that they are just and reasonable, and preventing discriminatory practices.
Market Oversight and Enforcement
FERC monitors energy markets to detect and prevent market manipulation, fraud, and other anti-competitive behaviors. The commission enforces compliance with its regulations and takes corrective actions when necessary.
Infrastructure Security and Reliability
FERC works to ensure the security and reliability of the nation’s energy infrastructure. This includes collaborating with other federal agencies, industry stakeholders, and state regulators to develop and enforce reliability standards.
