Federal Power Commission (FPC)
Definition
The Federal Power Commission (FPC) was an agency of the U.S. government created in 1920 to oversee and regulate aspects of the energy industries, specifically electricity, hydroelectric energy, and natural gas. The FPC’s mandate included granting licenses for hydroelectric projects, setting rates for electricity transmission, and overseeing interstate natural gas pipelines.
History
- Formation: The FPC was established by the Federal Water Power Act of 1920, initially composed of the Secretaries of War, Interior, and Agriculture.
- Reorganization: In 1930, it became an independent regulatory commission.
- Dissolution: In 1977, the FPC was dissolved and its responsibilities were transferred to the newly created Federal Energy Regulatory Commission (FERC) under the Department of Energy Organization Act.
Key Functions
- Hydroelectric Licensing: Authorized to issue licenses for the construction and operation of hydroelectric power projects.
- Rate Regulation: Set and regulated rates for electricity transmission and natural gas pipeline transportation.
- Energy Oversight: Provided comprehensive oversight of energy activities, ensuring fair prices and reliable services for consumers.
Examples
- Hydroelectric Projects: The FPC issued licenses allowing companies to build and operate hydroelectric dams which were critical to regional power supplies.
- Rate Cases: Set interstate electricity rates, ensuring that utilities charged fair prices while remaining economically viable.
Frequently Asked Questions (FAQs)
1. When was the Federal Power Commission (FPC) established?
The Federal Power Commission was established in 1920 by the Federal Water Power Act.
2. What were the main responsibilities of the FPC?
The FPC was responsible for hydroelectric licensing, rate regulation for electricity and natural gas transmission, and overall energy industry oversight.
3. What happened to the FPC?
The FPC was dissolved in 1977, and its functions were transferred to the Federal Energy Regulatory Commission (FERC).
4. What is the FERC?
The Federal Energy Regulatory Commission (FERC) is the successor agency to the FPC, established to regulate the interstate transmission of electricity, natural gas, and oil.
Related Terms
- Federal Energy Regulatory Commission (FERC): The current U.S. regulatory agency overseeing the energy industry, established in 1977.
- Hydroelectric Energy: Power generated from the movement of water, often regulated by licensing authorities such as the FPC (now FERC).
- Natural Gas Regulation: The regulation of natural gas extraction, production, and transmission, historically overseen by the FPC.
Online Resources
- Federal Energy Regulatory Commission (FERC) Official Website
- Department of Energy Website
- National Archives: Records of the Federal Power Commission
Suggested Books for Further Studies
- Power Struggle: World Energy in the Twenty-First Century by John R. Moroney and Matthew R. Simmons.
- Electricity Regulation in the US: A Guide by The Regulatory Assistance Project.
- Energy Law in a Nutshell by Joseph P. Tomain, Richard D. Cudahy.
Fundamentals of the Federal Power Commission: Regulatory Agencies Basics Quiz
### What year was the Federal Power Commission (FPC) established?
- [x] 1920
- [ ] 1900
- [ ] 1930
- [ ] 1977
> **Explanation:** The FPC was established in 1920 by the Federal Water Power Act to regulate aspects of the energy industries.
### What primary function did the FPC serve?
- [ ] Regulating telecommunications
- [x] Overseeing electricity and natural gas transmission
- [ ] Managing federal lands
- [ ] Licensing oil exploration
> **Explanation:** The FPC oversaw electricity and natural gas transmission as well as hydroelectric project licensing.
### Which law dissolved the FPC and created the FERC?
- [x] Department of Energy Organization Act
- [ ] Federal Power Act
- [ ] Energy Policy Act
- [ ] Natural Gas Act
> **Explanation:** The Department of Energy Organization Act of 1977 dissolved the FPC and created the FERC.
### What is the modern equivalent of the FPC?
- [ ] Environmental Protection Agency (EPA)
- [x] Federal Energy Regulatory Commission (FERC)
- [ ] Department of Energy (DOE)
- [ ] Bureau of Land Management (BLM)
> **Explanation:** The Federal Energy Regulatory Commission (FERC) is the modern agency that took over the responsibilities of the FPC in 1977.
### What was the initial composition of the FPC?
- [ ] Independent commissioners
- [ ] State governors
- [x] Secretaries of War, Interior, and Agriculture
- [ ] Members of Congress
> **Explanation:** The FPC was initially composed of the Secretaries of War, Interior, and Agriculture.
### Which key area was NOT under FPC's jurisdiction?
- [ ] Interstate electricity rates
- [x] Interstate telecommunications rates
- [ ] Natural gas pipeline transportation
- [ ] Hydroelectric licensing
> **Explanation:** The FPC did not regulate telecommunications; its jurisdiction covered energy transmission and hydroelectric licensing.
### Why was the FPC important for energy regulation?
- [ ] To oversee telecommunications
- [x] To set fair rates and ensure reliable energy services
- [ ] To create energy policies
- [ ] To manage federal forests
> **Explanation:** The FPC was crucial for setting fair rates and ensuring reliable energy services, which benefited consumers and the economy.
### Under the FPC's rules, who regulated interstate natural gas?
- [ ] State commissions
- [x] Federal Power Commission
- [ ] Environmental Protection Agency
- [ ] Local municipalities
> **Explanation:** The Federal Power Commission regulated interstate natural gas transportation and rates.
### What aspect of the energy industry did the FPC license?
- [ ] Nuclear energy
- [x] Hydroelectric projects
- [ ] Solar energy
- [ ] Wind farms
> **Explanation:** The FPC was responsible for licensing hydroelectric power projects.
### What agency took over the FPC's responsibilities?
- [ ] Environmental Protection Agency (EPA)
- [ ] Department of Energy (DOE)
- [ ] Federal Communications Commission (FCC)
- [x] Federal Energy Regulatory Commission (FERC)
> **Explanation:** The Federal Energy Regulatory Commission (FERC) took over the responsibilities of the FPC in 1977.
Thank you for exploring the Federal Power Commission (FPC) and testing your knowledge with our quiz! Keep learning to master the intricacies of regulatory agencies in the energy sector.
