Trystan Casey
In the United States, utility companies are regulated at the state and municipal levels by public service commissions. The Federal Energy Regulatory Commission (FERC) is an independent agency that regulates the interstate transmission of electricity, natural gas, and oil. FERC also has the power to regulate sales of wholesale power and transmission, review rates set by federal power marketing administrations, and issue permits for constructing or modifying electric transmission facilities. The Department of Energy and Nuclear Regulatory Commission (NRC) are also involved in regulating the electricity sector, with the NRC regulating civilian nuclear material use.
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What You'll Learn
Federal Energy Regulatory Commission (FERC)
The Federal Energy Regulatory Commission (FERC) is an independent regulatory agency within the United States Department of Energy. FERC was established by Congress to retain a separate independent regulatory body, with its predecessor, the Federal Power Commission (FPC), renamed and its independent status preserved.
FERC's primary role is to regulate the interstate transmission of electricity, natural gas, and oil. This includes approving rates for wholesale electricity sales and transmission for jurisdictional utilities, power marketers, and power exchanges, among others. FERC also reviews proposals for liquefied natural gas (LNG) terminals and interstate natural gas pipelines, as well as licensing hydropower projects.
FERC has a broad mandate to ensure safe, reliable, and economically efficient energy for consumers at a reasonable cost. It achieves this through various mechanisms, such as overseeing the issuance of stock and debt securities, reviewing rates set by federal power marketing administrations, and certifying small power production facilities. FERC also has limited jurisdiction over the siting of electric transmission facilities within designated National Interest Electric Transmission Corridors.
In February 2018, FERC issued Order No. 841, which required wholesale markets to be accessible to individual storage installations, regardless of their interconnection point. This order was challenged, but ultimately upheld by a United States court of appeals, demonstrating the reviewability of FERC decisions by federal courts.
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Nuclear Regulatory Commission (NRC)
The Nuclear Regulatory Commission (NRC) is an independent agency of the United States government, established by the Energy Reorganization Act of 1974. The NRC's mission is to regulate the nation's civilian use of nuclear materials, ensuring adequate protection of public health and safety, and promoting national defence and security.
The NRC's regulatory functions cover three main areas: reactors, materials, and waste. The commission oversees reactor safety, security, and licensing, including the renewal of licenses for commercial reactors generating electric power, and research and test reactors used for research, testing, and training. The NRC also manages the licensing of radioactive materials and radionuclide safety, as well as the storage, security, recycling, and disposal of nuclear waste and spent fuel.
The commission is divided into two committees: the Advisory Committee on Reactor Safeguards and the Advisory Committee on the Medical Uses of Isotopes. It also includes the Atomic Safety and Licensing Board Panel and eight commission staff offices, including the Office of Nuclear Reactor Regulation, the Office of Nuclear Regulatory Research, and the Office of Enforcement, which investigates reports by nuclear power whistleblowers.
The NRC is headed by five commissioners appointed by the President of the United States and confirmed by the Senate for five-year terms. Since 2000, meetings between the NRC and applicants or licensees have been open to the public.
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Tennessee Valley Authority (TVA)
The Tennessee Valley Authority (TVA) is a federally owned electric utility corporation in the United States. It was created in 1933 as part of President Franklin D. Roosevelt's New Deal. The TVA is a federal corporation and the nation's largest public power company. It is headquartered in Knoxville, Tennessee, and is the sixth-largest power supplier in the country.
The TVA's service area covers all of Tennessee and portions of Alabama, Mississippi, and Kentucky, as well as small areas of Georgia, North Carolina, and Virginia. It serves more than 10 million people across this seven-state region. The TVA provides electricity through a diverse portfolio that includes nuclear, coal-fired, natural gas-fired, hydroelectric, and renewable generation.
The initial purpose of the TVA was to provide navigation, flood control, electricity generation, fertilizer manufacturing, regional planning, and economic development to the Tennessee Valley. The region had suffered from a lack of infrastructure and extensive poverty during the Great Depression. The TVA was tasked with tackling important problems facing the valley, such as flooding, providing electricity to homes and businesses, and replanting forests.
The TVA is governed by a nine-member board of directors, nominated by the President of the United States and confirmed by the Senate. The board members choose the TVA's chief executive officer, who oversees daily operations. The TVA Police is the primary law enforcement agency for the company and was authorized as a federal law enforcement agency in 1994.
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Environmental Protection Agency (EPA)
The US Environmental Protection Agency (EPA) was created to protect human health and the environment. It was established on December 2, 1970, by the Richard Nixon administration, which made the environment a policy priority from 1969 to 1971. The EPA's creation was the culmination of a series of reorganizations of the US Public Health Service (PHS) that occurred between 1966 and 1973.
The EPA's primary predecessor was the former Environmental Health Divisions of the PHS. The agency also absorbed several other bureaus and administrations, including the entire National Air Pollution Control Administration, the Bureau of Solid Waste Management, the Bureau of Water Hygiene, and part of the Bureau of Radiological Health.
The EPA has played a significant role in the nation's environmental protection movement. In its early days, there was a strong sense of purpose and excitement surrounding the agency, with tens of thousands of people eager to participate in the effort to clean up America's environment. The EPA has continued to work towards its core mission of protecting human health and the environment through various initiatives and programs.
One notable initiative is the Energy Star program, which began in 1992 and encouraged major companies to retrofit their building space with more efficient lighting. By 2006, the program had expanded to include a wide range of Energy Star-certified products, from major appliances to home electronics. The EPA estimated that the program alone saved about $14 billion in energy costs in 2006.
In addition to its regular operations, the EPA has also undertaken several historic deregulatory actions. In 2025, the agency announced 31 historic actions to advance President Trump's executive orders and promote American energy and a lower cost of living for Americans. These actions included reconsidering guidelines and standards for the Steam Electric Power Generating Industry, as well as terminating certain programs and initiatives established under the Biden-Harris administration.
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Public Utility Holding Company Act of 2005 (PUHCA 2005)
In the United States, the Federal Energy Regulatory Commission (FERC) is the federal agency responsible for regulating the interstate transmission of electricity, natural gas, and oil. FERC is an independent agency that reviews proposals for liquefied natural gas (LNG) terminals and interstate natural gas pipelines, as well as licensing hydropower projects. The Energy Policy Act of 2005 enhanced FERC's oversight authority, which was previously established in the Federal Power Act (FPA) and the Natural Gas Act (NGA).
Prior to the Energy Policy Act of 2005, the Public Utility Holding Company Act of 1935 (PUHCA 1935) required "holding companies" with subsidiaries in the electric utility business or retail distribution of natural or manufactured gas to register with the U.S. Securities and Exchange Commission (SEC). PUHCA 1935 imposed strict operational limitations and disclosure requirements on these holding companies, effectively limiting ownership of public utilities to a small group of industry-specific companies.
The Energy Policy Act of 2005 included the Public Utility Holding Company Act of 2005 (PUHCA 2005), which repealed PUHCA 1935 and its requirements. With this new legislation, the SEC no longer has oversight authority over electric and gas holding companies, and the burden of oversight falls more heavily on FERC. PUHCA 2005 requires holding companies and their affiliates to provide FERC and state regulators access to their books and records, granting the commission additional authority over holding company transactions.
Other federal agencies with jurisdiction and/or safety and health programs related to the electric power generation, transmission, and distribution industry include the U.S. Department of Energy (DOE), the Environmental Protection Agency (EPA), the Nuclear Regulatory Commission (NRC), and the Tennessee Valley Authority (TVA). These agencies work to protect human health, ensure worker safety, and address environmental concerns related to electricity generation and consumption.
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Frequently asked questions
The Federal Energy Regulatory Commission (FERC) is the US government agency that regulates the interstate transmission of electricity, natural gas, and oil.
FERC has a range of regulatory functions in the utility sector, including the power to regulate sales of wholesale power and transmission in interstate commerce, and to grant and administer licenses for hydroelectric plants.
The Department of Energy, public service commissions, and state-level PUCs (Public Utility Commissions) also have a role in regulating electric companies.
The Energy Policy Act of 2005, the Public Utility Holding Company Act of 2005 (PUHCA 2005), and the Foreign Investment and National Security Act of 2007 (FINSA) are some key acts that impact the regulation of electric companies.
Government regulations can impact a utility company's profit margins by influencing the prices they charge, their budgetary processes, their ability to construct new facilities, the services they offer, and their energy efficiency programs.
