Federal Energy Regulatory Commission

The responsibilities of FERC include the following:

• Regulating the transmission and sale of natural gas for resale in interstate commerce;
• Regulating the transmission of oil by pipelines in interstate commerce;
• Regulating the transmission and wholesale sales of electricity in interstate commerce;
• Licensing and inspecting private, municipal, and state hydroelectric projects;
• Approving the siting of and abandonment of interstate natural gas facilities, including pipelines, storage and liquefied natural gas;
• Ensuring the reliability of high voltage interstate transmission system;
• Monitoring and investigating energy markets;
• Using civil penalties and other means against energy organizations and individuals who violate FERC rules in the energy markets;
• Overseeing environmental matters related to natural gas and hydroelectricity projects and major electricity policy initiatives; and
• Administering accounting and financial reporting regulations and regulating businesses of regulated companies.

FERC is a large independent regulatory agency within the United States Department of Energy that participates in business oversight.[2]^: 12 The President and Congress do not generally review FERC decisions, but the decisions are reviewable by the federal courts. FERC is self-funding, in that Congress sets its budget through annual and supplemental appropriations and FERC is authorized to raise revenue to reimburse the United States Treasury for its appropriations, through annual charges to the natural gas, oil, and electric industries it regulates.[3]

FERC is independent of the Department of Energy political structure because FERC activities "shall not be subject to further view by the Secretary [of Energy] or any officer or employee of the Department".[4] The Department of Energy can, however, participate in FERC proceedings as a third party.

FERC has promoted voluntary formation of regional transmission organizations (RTOs) and Independent System Operators (ISOs) to eliminate the potential for undue discrimination in access to the electric grid; regional and interregional transmission planning and cost allocation through the landmark Order No. 1000.

FERC investigated the alleged manipulation of electricity market by Enron and other energy companies, and their role in the California electricity crisis. FERC has collected more than $6.3 billion from California electric market participants through settlements. Since passage of the Energy Policy Act of 2005, FERC has imposed, through settlements and orders, more than $1 billion in civil penalties and disgorgement of unjust profits to address violations of its anti-market manipulation and other rules.

FERC regulates approximately 1,600 hydroelectric projects in the U.S. It is largely responsible for permitting construction of a large network of interstate natural gas pipelines. FERC also works closely with the United States Coast Guard to review the safety, security, and environmental impacts of proposed LNG terminals and associated shipping.

FERC is composed of up to five commissioners who are appointed by the President and confirmed by the Senate to staggered five-year terms. The President appoints one of the commissioners to be the chairman of FERC, the administrative head of the agency. FERC is a bipartisan body; no more than three commissioners may be of the same political party. Commissioners may continue in office past the end of their term if a successor has not yet been confirmed, up to the end of the current session of Congress. The commissioners are:

FERC has been subject to criticism and increasing activism by people from communities affected by its decisions approving pipeline and related projects.[27] They contend that FERC "blithely greenlights too many pipelines, export terminals and other gas infrastructure"[27] and that FERC's structure in which it recovers its annual operating costs directly from the entities it regulates creates bias in favor of the issuance of pipeline certificates.[28] Some of the critics have disrupted several regular open meetings of the Commission[29] and staged a couple of week-long blockades of FERC's headquarters in Washington, D.C., to make their points.[30] "Pipelines are facing unprecedented opposition," Commissioner LaFleur remarked to the National Press Club in a 2015 speech. "We have a situation here."[31][32][33]

FERC's decisions in those cases are often upheld by the courts. In a July 1, 2014, decision, No Gas Pipeline v. Federal Energy Regulatory Commission, the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) said that pipeline applicants are not likely to pursue many certificates that are hopeless. "The fact that they generally succeed in choosing to expend their resources on applications that serve their own financial interests does not mean that an agency which recognizes merit in such applications is biased," the court said.[34] Others have directly disputed FERC's critics by pointing out, "FERC is a creature of law. It follows a careful administrative path to regulate only a portion of natural gas such as interstate pipelines and LNG import and export terminals. That regulation includes extensive environmental review, driven by many federal laws enacted by Congress, signed by the president, and reviewed and upheld by the U.S. Supreme Court. If the agency were to adopt the path [suggested by these critics], FERC's decisions would routinely be overturned by the federal courts."[35]

The United States District Court for the District of Columbia also dismissed a case involving allegations of structural bias on the part of FERC. The plaintiffs contended that the Omnibus Budget Act of 1986 funding mechanism requires the commission to recover its budget through proportional charges on regulated entities, therefore making FERC biased in favor of the industry from which it gets its funding. But in an order issued March 22, 2017, the court said the plain language of the statute indicates that FERC does not have control over its own budget. "The Commission's budget cannot be increased by approving pipelines; rather, [the statute] requires the Commission to make adjustments to 'eliminate any overrecovery or underrecovery.' If Plaintiffs are unhappy with Congress's chosen appropriations to the Commission..., Plaintiffs' recourse lies with their legislative representatives."[28]

In New Jersey, the FERC approval of the PennEast Pipeline was met with widespread criticism by environmental groups, which called the decision highly partisan. "FERC has once again demonstrated its tremendous bias for, and partnership with, the pipeline industry," said Maya van Rossum, leader of the Delaware Riverkeeper Network. Doug O'Malley, president of Environment New Jersey, called the FERC approval of the pipeline a "disaster." David Pringle, state campaign director of Clean Water Action and 2018 Congressional candidate, suggested the FERC was serving a partisan interest over the interests of the people of New Jersey, suggesting "The FERC needs to remember it works for the people of the United States not PennEast."[36] These criticisms were unfounded as the D.C. Circuit Court of Appeals on July 10, 2018, rejected the Delaware Riverkeeper Network and Maya Van Rossum's claim that FERC has an incentive to award pipeline certificates because it collects its operating expenses from regulated parties. Upholding a lower court ruling, the D.C. Circuit also rejected the Delaware Riverkeeper Network's challenge to FERC's use of tolling orders to meet its statutory deadlines for acting on rehearing applications.[37]

However, the D.C. Circuit has provided additional guidance concerning Commission procedures, stating that in one case FERC failed to consider the cumulative environmental impact of four projects that had been separately proposed by the same pipeline. The D.C. Circuit held that the projects were not financially independent and were "a single pipeline" that was "linear and physically interdependent," so the cumulative environmental impacts should have been considered concurrently.[38] In a separate decision, the D.C. Circuit later sustained the commission's conduct of separate environmental assessments when it clarified that the "critical" factor was that all of the pipeline's projects were either under construction or pending before FERC for environmental review at the same time, noting that the projects lacked temporal overlap.[39] Furthermore, in another case, the D.C. Circuit sustained the commission's use of a separate environmental assessment when it reasoned that the projects in dispute were "unrelated" and did not depend on one another for their justification.[40] This guidance has allowed FERC to address additional claims of improper segmentation.[41]

FERC's leaders have stressed many times since the onset of the increased activism that the proper way to oppose a proposed new infrastructure project is by participating in the related proceeding by submitting comments and participating in public comment sessions, site visits and scoping meetings, since FERC decisions can be appealed up to the Supreme Court.

• Category:Federal Energy Regulatory Commission chairpersons
• 21st-century fossil fuel regulations in the United States
• Custody transfer
• High-voltage direct current
• North American Electric Reliability Corporation (NERC)
• United States energy law
• Scenic Hudson Preservation Conference v. Federal Power Commission
• Title 18 of the Code of Federal Regulations

• Gies, Erica. Making the Consumer an Active Participant in the Grid, The New York Times, November 29, 2010. Discusses distributed generation and the U.S. Federal Energy Regulatory Commission.
• White, Richard (2012). Railroaded: The Transcontinentals and the Making of Modern America. W. W. Norton & Company. ISBN 978-0393342376.

• Official site
  • Electricity
  • LNG Terminals
  • Natural Gas
  • Hydroelectric
• Federal Energy Regulatory Commission in the Federal Register