Federal Energy Regulatory Commission

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The Federal Energy Regulatory Commission (FERC) is an independent federal agency that is responsible for the regulation of interstate transmission of electricity, oil and natural gas.[1]

In 2014, the commission employed 1,432 full-time equivalents (FTE). The fiscal year 2014 budget for the commission totaled $300.25 million.[2]

History

The Federal Power Commission (FPC), the predecessor to FERC, was formed in 1920 to coordinate federal hydroelectric projects. Initially, the commission operated under the administration of the Secretary of War, the Secretary of the Interior and the Secretary of Agriculture and all commission employees (with the exception of the FPC Executive Secretary) were borrowed from these departments. In 1928, Congress authorized the FPC to hire its own personnel. In 1930, a five-member, bipartisan commission was formed to govern the FPC.[3]

From 1935 to 1967, the jurisdiction of the FPC broadened considerably, owing to a series of congressional acts and court cases. These included:[3]

  • Enactment of the Federal Power Act of 1935 and the Natural Gas Act of 1938, which empowered the FPC to regulate the sale and transport of electricity and natural gas.
  • The 1954 decision in Phillips Petroleum Co. v. Wisconsin held that the FPC maintained jurisdiction over facilities producing natural gas sold in interstate commerce.
  • The 1964 decision in City of Colton v. SoCal Edison held that the FPC maintained jurisdiction over intrastate sales of power that had been transmitted across state lines.

The FPC was reorganized in 1977 as FERC.[3]

Structure

Mission

The commission's mission statement is as follows:[4]

Assist consumers in obtaining reliable, efficient, and sustainable energy services at a reasonable cost through appropriate regulatory and market means.[5]

—Federal Energy Regulatory Commission

Responsibilities

FERC is responsible for the following regulatory functions:[1]

  • Regulates the transmission and wholesale sales 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 pipeline 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;
  • Ensures 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; and
  • Administers accounting and financial reporting regulations and conduct of regulated companies.[5]

—Federal Energy Regulatory Commission

Commission members

The commission is composed of up to five members appointed by the President of the United States with the advice and consent of the United States Senate. Commission members serve five-year terms and no more than three members may belong to the same political party.[6]

As of July 2014, the following were members of the commission:

FERC members as of July 2014
Name Position Date first sworn in Current term expiration date Appointed by
Cheryl A. LaFleur[7] Acting Chairman July 13, 2010 June 30, 2019 Barack Obama
Tony Clark[8] Commissioner June 15, 2012 June 30, 2016 Barack Obama
Philip D. Moeller[9] Commissioner July 24, 2006 June 30, 2015 George W. Bush
John R. Norris[10] Commissioner January 11, 2010 June 30, 2017 Barack Obama

Organization chart

The organization chart below is current as of July 2014.

FERC org chart July 2014.png

Budget and finance

FERC finances itself through the assessment of annual charges and filing fees on the industries the commission regulates. Upon collecting these fees, FERC deposits the funds into the United States Treasury, thereby offsetting the cost of the appropriation made by the United States Congress (resulting in net appropriations of zero). The table below summarizes the commission's collections and appropriations for fiscal years 2016, 2015 and 2014.[2]

FERC appropriations and collections by fiscal year
Year Appropriation Collections Net appropriation
2016 (request) $319,800,000 $319,800,000 $0
2015 (estimate) $304,389,000 $304,389,000 $0
2014 (actual) $304,600,000 $304,600,000 $0
Note: The federal fiscal year begins on October 1 and ends on September 30 of the next calendar year.
Source: Federal Energy Regulatory Commission, "FY 2016 Congressional Performance Budget Request," accessed April 6, 2014.

These figures for fiscal years 2016 and 2015 can be further broken down by spending category (e.g., salaries and benefits, rent, information technology, etc.). The table below summarizes budget allocations by spending categories.

FERC budgets by spending category ($ in thousands)
Spending category FY 2015 estimate FY 2016 request Difference Percent difference
Salaries and benefits $225,846 $230,834 $4,989 2.2%
Rent $23,439 $30,200 $6,761 28.8%
Environmental and program contracts $7,348 $8,601 $1,253 17.1%
Information technology $30,796 $29,844 -$952  ‐3.1%
Administrative $20,148 $17,774 -$2,374 ‐11.8%
Building consolidation 19,700 $2,547 -$17,153 -87.1%
TOTAL $304,389 $319,800 $15,411 5.1%
Source: Federal Energy Regulatory Commission, "FY 2016 Congressional Performance Budget Request," accessed April 6, 2015.

Strategic plan

In March 2014, FERC released its strategic plan for fiscal years 2014 through 2018. The plan consists of three broad goals and seven related objectives. These are summarized below:[4]

  • Goal 1: Ensure Just and Reasonable Rates, Terms, and Conditions
    • Objective 1.1: Establish Commission rules and policy that will result in just, reasonable, and not unduly discriminatory or preferential rates, terms, and conditions of jurisdictional service.
    • Objective 1.2: Increase compliance with FERC rules; detect and deter market manipulation.
  • Goal 2: Promote Safe, Reliable, Secure, and Efficient Infrastructure
    • Objective 2.1: Foster economic and environmental benefits for the nation through approval of natural gas and hydropower projects.
    • Objective 2.2: Minimize risks to the public associated with FERC-jurisdictional energy infrastructure.
  • Goal 3: Mission Support through Organizational Excellence
    • Objective 3.1: Manage Commission Resources Effectively and Efficiently.
    • Objective 3.2: Empower Commission Employees to Drive Success.
    • Objective 3.3: Facilitate public trust and understanding of Commission activities by promoting transparency, open communication, and a high standard of ethics.[5]

—Federal Energy Regulatory Commission

The complete strategic plan can be accessed here.

In the news

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See also

External links

References