The Federal Energy Regulatory Commission (FERC or the Commission) is an independent agency that regulates the transmission and wholesale sale of electricity and natural gas in interstate commerce, and regulates the transportation of oil by pipelines in interstate commerce. FERC also reviews proposals to build interstate natural gas pipelines, natural gas storage projects, and liquefied natural gas (LNG) terminals, and FERC licenses non-federal hydropower projects. Congress assigned these responsibilities to FERC in various laws enacted over nearly 100 years, such as the Federal Power Act, Public Utility Regulatory Policies Act, Natural Gas Act, and Interstate Commerce Act. More recently, as part of the Energy Policy Act of 2005, Congress gave FERC additional responsibilities to protect the reliability and cybersecurity of the bulk-power system through the establishment and enforcement of mandatory reliability standards, as well as additional authority to enforce FERC regulatory requirements through the imposition of civil penalties and other means. FERC is composed of up to five commissioners who are appointed by the President of the United States with the advice and consent of the Senate. Commissioners serve staggered five-year terms and have an equal vote on the orders through which FERC acts. The President appoints one of the commissioners to be the chairman, the administrative head of the agency. FERC is a bipartisan body; no more than three commissioners may be of the same political party. To carry out its authorities, the Commission has approximately 1,500 staff.
FERC's Mission - from the FERC 2018 Agency Financial Report
ECONOMICALLY EFFICIENT, SAFE, RELIABLE, AND SECURE ENERGY FOR CONSUMERS
Assist consumers in obtaining economically efficient, safe, reliable, and secure energy services at a reasonable cost through appropriate regulatory and market means, and collaborative efforts.
GOAL 1: ENSURE JUST AND REASONABLE RATES, TERMS, AND CONDITIONS.
Ensure that rates, terms, and conditions of jurisdictional energy services are just, reasonable, and not unduly discriminatory or preferential.
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, AND SECURE INFRASTRUCTURE. Promote the development of safe, reliable, and secure infrastructure that serves the public interest.
Objective 2.1: Facilitate benefits to the nation through the review of natural gas and hydropower infrastructure proposals.
Objective 2.2: Minimize risks to the public associated with FERC-jurisdictional energy infrastructure.
GOAL 3: MISSION SUPPORT THROUGH ORGANIZATIONAL EXCELLENCE. Achieve organizational excellence by using resources effectively, adequately equipping FERC employees for success, and executing responsive and transparent processes that strengthen public trust.
Objective 3.1: Manage resources effectively through an engaged workforce.
Objective 3.2: Facilitate public trust and understanding of Commission activities by promoting transparency, open communication, and a high standard of ethics.
COMPLIANCE with FERC's rules, orders, etc. and utility tariffs:
The following information is from the Division of Audits and Accounting (DAA) section of FERC’s 2020 Enforcement Report.
It is imperative that companies establish and maintain effective compliance programs. Such programs should foster a culture of compliance that begins at the executive level and permeates throughout the organization. Effective compliance programs increase the likelihood that jurisdictional companies will understand and follow the Commission’s rules, regulations, and orders, as well as their own tariff provisions, both in letter and spirit. However, since each company is unique in terms of size, region, organizational structure, and other relevant characteristics, no two compliance programs are alike. Each company must tailor its program to the specific challenges it faces. Notwithstanding these differences, DAA has found that the strongest compliance programs include a proactive program that:
FERC's Mission - from the FERC 2018 Agency Financial Report
ECONOMICALLY EFFICIENT, SAFE, RELIABLE, AND SECURE ENERGY FOR CONSUMERS
Assist consumers in obtaining economically efficient, safe, reliable, and secure energy services at a reasonable cost through appropriate regulatory and market means, and collaborative efforts.
GOAL 1: ENSURE JUST AND REASONABLE RATES, TERMS, AND CONDITIONS.
Ensure that rates, terms, and conditions of jurisdictional energy services are just, reasonable, and not unduly discriminatory or preferential.
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, AND SECURE INFRASTRUCTURE. Promote the development of safe, reliable, and secure infrastructure that serves the public interest.
Objective 2.1: Facilitate benefits to the nation through the review of natural gas and hydropower infrastructure proposals.
Objective 2.2: Minimize risks to the public associated with FERC-jurisdictional energy infrastructure.
GOAL 3: MISSION SUPPORT THROUGH ORGANIZATIONAL EXCELLENCE. Achieve organizational excellence by using resources effectively, adequately equipping FERC employees for success, and executing responsive and transparent processes that strengthen public trust.
Objective 3.1: Manage resources effectively through an engaged workforce.
Objective 3.2: Facilitate public trust and understanding of Commission activities by promoting transparency, open communication, and a high standard of ethics.
COMPLIANCE with FERC's rules, orders, etc. and utility tariffs:
The following information is from the Division of Audits and Accounting (DAA) section of FERC’s 2020 Enforcement Report.
It is imperative that companies establish and maintain effective compliance programs. Such programs should foster a culture of compliance that begins at the executive level and permeates throughout the organization. Effective compliance programs increase the likelihood that jurisdictional companies will understand and follow the Commission’s rules, regulations, and orders, as well as their own tariff provisions, both in letter and spirit. However, since each company is unique in terms of size, region, organizational structure, and other relevant characteristics, no two compliance programs are alike. Each company must tailor its program to the specific challenges it faces. Notwithstanding these differences, DAA has found that the strongest compliance programs include a proactive program that:
- Equips staff and management with sufficient training, education, tools, and other resources to detect issues in a timely manner to correct or prevent noncompliance;
- Provides effective lines of communication and notifies staff of standards through well-publicized policies and procedures;
- Stays abreast of compliance trends by reviewing Commission orders and audit reports, and evolves based on these trends and other developments in the industry;
- Has the active involvement of senior management to provide a tangible demonstration of “tone-from-the-top” as well as the allocation of funds necessary for such programs;
- Designates a compliance officer and compliance committee, charged with development and oversight of compliance activities and metrics that assess program effectiveness;
- Has the active involvement of internal audit and monitoring functions to routinely assess compliance with tariff provisions and Commission rules, orders, and regulations, to foster a strong and sustainable culture of commitment to compliance on an enterprise-wide basis; and
- Encourages a policy and culture of seeking guidance from the Commission as necessary to ensure compliance, including an effective process to self-report noncompliance identified through internal oversight activities.
