Federal Energy Regulatory Commission FERC

The Federal Power Commission, created by the Federal Water Power Act on June 10, 1920, to license hydroelectric dams, later gained authority over interstate electricity and natural gas sales. Amid the energy crises of the 1970s, the Department of Energy Organization Act of August 4, 1977, replaced it with the Federal Energy Regulatory Commission, which began on October 1, 1977. FERC is an independent commission housed within the Energy Department, with five commissioners serving five-year terms, no more than three from one party.

FERC sets rules and approves rates for interstate electricity transmission and wholesale power sales, oversees regional grid operators and power markets, approves interstate natural gas pipelines and export terminals, regulates oil pipeline rates, licenses nonfederal hydropower dams, and enforces grid reliability standards developed by the North American Electric Reliability Corporation. Its 1996 open-access orders opened transmission lines to competing generators and helped create today's competitive power markets. Retail electricity rates and power plant siting remain largely with the states.

Rising electricity demand from data centers and manufacturing, slow connection of new power plants to the grid, and the retirement of older plants have made FERC's work on interconnection and transmission planning more contentious, including major orders in 2023 and 2024. A February 2025 executive order required independent agencies, including FERC, to submit significant rules for White House review, and in 2025 the Energy Secretary asked FERC to speed up connections for large power users such as data centers. Supporters said the changes would align energy policy with an elected President, while critics warned they could politicize decisions affecting reliability and prices.