|The Federal Energy Regulatory Commission|
Harvey Pitt -SEC
The Department of Energy created the Federal Energy Regulatory Commission on October 1, 1977 to monitor wholesale electricity prices. Charged with keeping the system fair, FERC wields the power to regulate pricing and mandate refunds to overcharged consumers.
Since its creation, FERC's role has expanded to include regulating and overseeing energy industries, including hydroelectric projects, oil pipelines, wholesale electricity rates, and the transmission and sale of natural gas. FERC's responsibilities have expanded to monitor the growing trend toward energy deregulation. Specific areas under FERC's watch include the interstate transmission and sale of natural gas and oil by pipeline and the regulation of the flow and sale of electricity between states.
The commission also licenses and inspects private, municipal and state hydroelectric projects and oversees environmental matters involving natural gas, oil, electricity and hydroelectric projects. FERC is responsible for administering accounting and financial reporting regulations and monitoring the conduct of jurisdictional companies. The commission approves site choices of interstate pipeline facilities and is responsible for regulating the prices of around 73 percent of U.S. electricity consumption.
Five members, selected by the President of the United States with input and approval from the U.S. Senate, sit on FERC's governing board, although no more than three of the five members may have the same political affiliation. Of the five, the president selects one to serve as the agency's chair and administrative head. The chair, who normally holds the same party affiliation as the president, then serves as the tie-breaking vote on deadlocked issues. Each commissioner serves a five-year term, and each member's vote has equal weight.