The Federal Energy Regulatory Commission (“Commission”) is the U.S. federal agency with jurisdiction over interstate electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. It is an independent regulatory agency within the U.S. Department of Energy (“DOE”). It also reviews proposals to build liquefied natural gas (LNG) terminals and interstate natural gas pipelines as well as licensing hydropower projects. However theDOE can intervene like any other party in Commission proceedings. The Commission activities are not subject to further review by the Secretary of Energy or any officer or employee of the DOE.
The regulations of the Commission can be found under Title 18 Chapter I of the Code of Federal Regulations (CFR). It may conduct investigations relating to any matter subject to its jurisdiction[i]. These investigations may be formal or preliminary, and public or private[ii]. It is to be noted that all information and documents obtained during the course of an investigation and all investigative proceedings are generally treated as nonpublic by the Commission[iii].
If any formal investigation ordered by the Commission, any member of the Commission or the investigating officer may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, contracts, agreements or other records relevant or material to the investigation[iv].
It is to be noted that any person who is compelled or requested to furnish documentary evidence or testimony in a formal investigation be shown the Commission’s order of investigation. Such a person, at a formal investigation by request or permission of the investigating officer may be accompanied, represented, and advised by counsel[v].
The Energy Policy Act of 2005 gives the Commission additional responsibilities. They are as follows:
- Regulate the transmission and wholesale sales of electricity in interstate commerce;
- Review certain mergers and acquisitions and corporate transactions by electricity companies;
- Regulate the transmission and sale of natural gas for resale in interstate commerce;
- Regulate the transportation of oil by pipeline in interstate commerce;
- Approve the siting and abandonment of interstate natural gas pipelines and storage facilities;
- Review the siting application for electric transmission projects under limited circumstances;
- Ensure the safe operation and reliability of proposed and operating LNG terminals;
- License and inspects private, municipal, and state hydroelectric projects;
- Protect the reliability of the high voltage interstate transmission system through mandatory reliability standards;
- Monitor and investigates energy markets;
- Enforce FERC regulatory requirements through imposition of civil penalties and other means;
- Oversee environmental matters related to natural gas and hydroelectricity projects and other matters; and
- Administer accounting and financial reporting regulations and conduct of regulated companies.
However, many areas that are outside the jurisdiction of the Commission are dealt with by the State Public Utility Commissions. Some of the areas outside the jurisdiction of the Commission are:
- Issuance of State Water Quality Certificates;
- Oversight for the construction of oil pipelines;
- Abandonment of service as related to oil facilities;
- Mergers and acquisitions as related to natural gas and oil companies;
- Regulation of local distribution pipelines of natural gas;
- Development and operation of natural gas vehicles;
- Reliability problems related to failures of local distribution facilities.
[i] 18 CFR 1b.3.
[ii] 18 CFR 1b.4.
[iii] 18 CFR 1b.9.
[iv] 18 CFR 1b.13.
[v] 18 CFR 1b.16.