Legal Definitions - Federal Power Commission

The Federal Power Commission (FPC) was an independent agency of the U.S. federal government, established in 1920. Its primary role was to regulate the interstate transmission and sale of electricity and natural gas, as well as to license and oversee hydroelectric power projects across the United States. The FPC was responsible for ensuring fair rates, reliable service, and the proper development of energy resources.

In 1977, the FPC was abolished, and its functions were largely transferred to the newly created Federal Energy Regulatory Commission (FERC). Therefore, when you encounter the term "Federal Power Commission," it refers to the historical predecessor of FERC, which performed similar regulatory duties before its restructuring.

• Example 1: Hydroelectric Dam Licensing

  Imagine it's the 1950s, and a power company proposes building a large hydroelectric dam on a river that flows through multiple states to generate electricity. Before construction could begin, the power company would have needed to apply to the Federal Power Commission for a license. The FPC would have reviewed the project's economic viability, environmental impact, and its effect on interstate power supply, ultimately deciding whether to grant the license and under what conditions.

  This example illustrates the FPC's authority over the licensing and regulation of hydroelectric projects that impacted interstate commerce, a key part of its mandate to manage energy resources.

• Example 2: Interstate Natural Gas Pipeline Approval

  Consider a scenario in the early 1970s where a natural gas company planned to construct a new pipeline to transport gas from production fields in Texas to consumers in New York, crossing several state lines. The company would have been required to seek approval from the Federal Power Commission for the construction and operation of this interstate pipeline. The FPC would have evaluated the necessity of the pipeline, its proposed route, its capacity, and the rates the company intended to charge for transporting the gas.

  This highlights the FPC's jurisdiction over the interstate transmission of natural gas, ensuring that such critical infrastructure projects served the public interest and operated under regulated terms.

• Example 3: Regulating Interstate Electricity Rates

  In the 1960s, a utility company that generated electricity in one state and sold it wholesale to another utility in a neighboring state sought to increase its rates. Because the electricity was transmitted and sold across state lines, the proposed rate increase would have fallen under the purview of the Federal Power Commission. The FPC would have conducted a review to determine if the new rates were "just and reasonable," considering the utility's costs, investments, and a fair return, before approving or denying the increase.

  This exemplifies the FPC's role in regulating the wholesale rates for electricity transmitted in interstate commerce, protecting consumers and ensuring fair practices among utilities.