Federal Energy Regulation Commission Law and Legal Definition

The Federal Energy Regulatory Commission (FERC) is an independent agency having jurisdiction over interstate electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. FERC reviews and authorizes liquefied natural gas (LNG) terminals, interstate natural gas pipelines and non-federal hydropower projects. Certain additional powers are granted to the FERC through the Energy Policy Act of 2005. They are:

1. to regulate the transmission and wholesale sales of electricity in interstate commerce;

2. to review certain mergers and acquisitions and corporate transactions by electricity companies;

3. to regulate the transmission and sale of natural gas for resale in interstate commerce;

4. to regulate the transportation of oil by pipeline in interstate commerce;

5. to approve the siting and abandonment of interstate natural gas pipelines and storage facilities;

6. to review the siting application for electric transmission projects under limited circumstances;

7. to ensure the safe operation and reliability of proposed and operating LNG terminals;

8. to license and inspect private, municipal, and state hydroelectric projects;

9. to protect the reliability of the high voltage interstate transmission system through mandatory reliability standards;

10. to monitor and investigate energy markets;

11. to enforce FERC regulatory requirements through imposition of civil penalties and other means;

12. to oversees environmental matters related to natural gas and hydroelectricity projects and other matters; and

13. to administer accounting and financial reporting regulations and conduct of regulated companies.

FERC is composed of five commissioners, appointed by the President of the U.S. with the advice and consent of the Senate for a term of five years. These commissioners appointed have equal voting right on regulatory matters.