The Federal Energy Regulatory Commission, or FERC, is an independent agency that regulates the interstate transmission of electricity, natural gas, and oil. FERC also reviews proposals to build liquefied natural gas (LNG) terminals and interstate natural gas pipelines as well as licensing hydropower projects. The Energy Policy Act of 2005 gave FERC additional responsibilities as outlined and updated Strategic Plan. As part of that responsibility, FERC:

  • Regulates the transmission and wholesale sale of electricity in interstate commerce
  • Reviews certain mergers and acquisitions and corporate transactions by electricity companies
  • Regulates the transmission and sale of natural gas for resale in interstate commerce
  • Regulates the transportation of oil by pipelines in interstate commerce
  • Approves the siting and abandonment of interstate natural gas pipelines and storage facilities
  • Reviews the siting application for electric transmission projects under limited circumstances
  • Assesses the safe operation and reliability of proposed and operating LNG terminals
  • Licenses and inspects private, municipal, and state hydroelectric projects
  • Protects the reliability of the high voltage interstate transmission system through mandatory reliability standards
  • Monitors and investigates energy markets
  • Enforces FERC regulatory requirements through imposition of civil penalties and other means
  • Oversees environmental matters related to natural gas and hydroelectricity projects and other matters
  • Administers accounting and financial reporting regulations and conduct of regulated companies

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What FERC Does Not Do

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Many areas outside of FERC’s jurisdictional responsibility are dealt with by State Public Utility Commissions. Areas considered outside of FERC's responsibility include:

  • Regulate retail electricity and natural gas sales to consumers
  • Approve physical construction of electric generation facilities
  • Regulate activities of the municipal power systems, federal power marketing agencies, and most rural electric cooperatives
  • Regulate nuclear power plants
  • Issue State Water Quality Certificates
  • Oversee the construction of oil pipelines
  • Oversee abandonment of service as related to oil facilities
  • Regulate mergers and acquisitions as related to natural gas and oil companies
  • Exercise responsibility for pipeline transportation on or across the Outer Continental Shelf or for pipeline safety
  • Regulate local distribution pipelines of natural gas
  • Oversee development and operation of natural gas vehicles
  • Address reliability problems related to failures of local distribution facilities
  • Regulate tree trimmings near local distribution power lines in residential neighborhoods


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This page was last updated on August 16, 2022