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FERC and the States

       The U.S. has adopted a federalist system for regulating the electricity industry in this country. The Commission has an important role, and state regulators have an important role. Below is an illustration of these roles:

 

FEDERAL REGULATION

  • Wholesale transactions (sales of energy for resale)
  • Interstate transmission (transfers of power across state lines)
    • Rates charged for transmission of oil
  • Hydroelectric licenses
    • Licensing of nonfederal hydroelectric projects
    • Inspection of hydroelectric projects for safety issues
  • Natural gas pipeline certification

STATE REGULATION

  • Retail sales (sales of energy to users)
  • Intrastate transmission (transfers of power with state boundaries)
  • Certification for new electric generation and electric transmission facilities
  • Certification for oil pipelines
  • Develop retail franchise areas
  • Enforce service and quality standards
  • Set retail tariffs
  • Approve planning of transmission and generation facilities
  • Approve construction of non-hydro generation and transmission facilities
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