Federal Power Commission

Federal Power Commission (FPC), former independent agency of the United States government that regulated the interstate activities of the electric power and natural-gas industries. The FPC was created by the Federal Water Power Act of 1920; at first it confined itself to licensing hydroelectric projects located on U.S. government lands or navigable waters. The FPC was composed of the secretaries of war, interior, and agriculture until its reorganization in 1930 as an independent agency with five full-time members who were appointed by the president with the advice and consent of the Senate.

In 1935 a new Federal Power Act was drawn up. The first part of the new act incorporated the original Federal Water Power Act; the second and third parts gave the commission certain responsiblities relating to the adequacy and reliability of the nation's electric power supply and authority over the interstate transmission of electric energy and the wholesale rates for its sale, as well as authority to regulate securities, mergers, consolidations, acquisitions, and accounts of electric utilities subject to its jurisdiction under certain circumstances. The subsequent Natural Gas Act of 1938 gave the commission jurisdiction over the interstate transportation and sale of natural gas. The commission authorized construction and operation of interstate natural-gas pipelines, regulated wholesale natural-gas rates and the import and export of natural gas, and supervised the accounting practices of interstate pipeline companies. In 1954 the U.S. Supreme Court ruled that the rates and sales of independent producers selling natural gas in interstate commerce were also subject to FPC jurisdiction. In the 1960s and '70s, the FPC was concerned with helping to solve the natural-gas shortage, with proposals on liquefied natural gas and synthetic gas, with environmental considerations, and with the problems involved in regulating the wellhead prices of natural gas.

The activities of the FPC were gradually broadened to include approving rates for power generated at certain federal hydroelectric projects and recommending facilities for installation at dams constructed by the Army Corps of Engineers. The commission was responsible for seeking ways to meet the electric energy demands of the nation with minimum adverse environmental impact on air, land, and water resources. The FPC also ensured that the hydroelectric power projects it licensed included recreation areas to enhance or preserve the beauty of the project grounds and waters. Another responsibility of the commission was attention to the adequacy of the nation's natural-gas supply in relation to demand. In 1978 the FPC was abolished, and all its responsibilities were taken over by the new Department of Energy.