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Regulation

All utilities are regulated one way or another

The Federal Energy Regulatory Commission in Washington, DC.

The Federal Energy Regulatory Commission (FERC) has jurisdiction over interstate commerce (wholesale sales and transmission) for investor-owned utilities (IOUs), power markers, and Independent System Operators.

The FERC approves rates for sale of wholesale electricity and reviews rates set by the Federal Power Marketing Administrations (PMAs).

State Public Utilities Commissions or Public Service Commissions have jurisdiction over intrastate electricity trade for IOUs. 

Municipals utilities are self-regulated by their boards of directors, serving mainly as distribution-only utilities. 

The Rural Utilities Services (RUS) and the elected boards of directors regulate consumer-owned cooperatives.

Restructuring the electric industry

The electricity industry is last of the big industries to face "deregulation." Deregulation is a misnomer because under deregulation there will continue as much regulation as there has ever been. Restructuring the industry may be a more accurate description of the process. Restructuring the industry has not been an easy or smooth process in that the industry is large and complex. Congress set in motion restructuring of the industry through passage of The Energy Policy Act of 1992.  

Short history of restructuring

The Energy Policy Act of 1992 mandated that FERC open up the national grid on a non-discriminatory, non-preferential basis for wholesale delivery of electrical power.

On April 24, 1996, FERC issued Orders 888 and 889 that encouraged wholesale competition. The primary objective of these orders was the elimination of monopoly power over the transmission of electricity. To achieve this objective, FERC required all public utilities that own, control, or operate facilities used for transmitting electric energy in interstate commerce to:

• file open-access nondiscriminatory transmission tariffs containing minimum terms and conditions, 
• take transmission service (including ancillary services) for their own new wholesale sales and purchases of electricity under open-access tariffs,
• develop and maintain a same-time information system that will give existing and potential users the same access to transmission information that the public utilities enjoy, and 
• separate the transmission from generating and marketing functions and communications.

FERC issued Order 2000 asking all transmission-owning utilities, including non-public utilities, to place their transmission facilities under the control of an appropriate regional transmission organization (RTO).

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• Regulation
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FERC Juridiction

Basin Electric, as a cooperative, is not under FERC jurisdiction but does have a FERC approved tariff giving it the ability to use transmission of other utilities. Basin Electric has also separated its transmission and generation functions.