Energy Law

In the United States, energy is regulated widely through the United States Department of Energy as well as secretaries of state or corporation commissions.  In the past, the federal government did not play an important and active role in the energy industries.  It was during the Great Depression and World War II that the federal government began to establish a fragmented regulatory framework.

In 1970, the energy crises forced the federal government to consolidate its fragmented regulatory framework.  Finally, in 1977 the Department of Energy was established.  A national energy plan was created for the first time.  Early regulation began with the Federal Power Act of 1920, which established the Federal Power Commission.  The Federal Power Act was amended in 1935 and 1986.  This allowed development of a regulatory framework.

The Federal Energy Regulatory Commission (FERC) was created in 1977, within the newly created Department of Energy and assumed the functions of several agencies, including the Federal Power Commission.  The FERC is an independent regulatory agency that oversees and regulates the sale of the natural gas, oil, and electricity markets in the U.S.  The FERC provides licenses for hydroelectric plants and reacts to environmental matters.  The Commission consists of 5 members appointed by the president and they serve for a time period of five years.

The Nuclear Power Industry is regulated by the United States Nuclear Regulatory Commission (NRC).  The mission of the NRC is to protect the public health and safety from nuclear radiation and waste.  It also promotes the common defense by a regime of rulemaking, inspection, and licensing.

Recently there was a shift towards deregulation of various energy industries.  The purpose of deregulation is to increase market competition and to serve the goal of cheap and reliable energy.  Vertically integrated power companies are breaking apart in order to create competition at every step of the chain from production to consumption.

The purpose of energy laws is to provide affordable energy by sustaining competitive markets, protect the economic, environmental, and security interests of the United States.  Energy laws control the use and taxation of renewable and non-renewable energy.  Non-renewable sources are those which cannot be replenished.  Most commonly used non-renewable sources of energy are oil and petroleum products, natural gas, coal, and uranium.  Fossil fuels are non-renewable, but not all non-renewable energy sources are fossil fuels.

Pursuant to 42 USCS § 15852, renewable energy means electric energy generated from solar, wind, biomass, landfill gas, ocean (including tidal, wave, current, and thermal), geothermal, municipal solid waste, or new hydroelectric generation capacity achieved from increased efficiency or additions of new capacity at an existing hydroelectric project.

With respect to dwellings, a renewable energy system means a system that, when installed in connection with a dwelling, transmits or uses solar energy, energy derived from the geothermal deposits, energy derived from biomass, or any other form of renewable energy that the Secretary of Energy specifies by regulations, for the purpose of heating or cooling the dwelling or providing hot water or electricity for use within the dwelling, or wind energy used for non-business residential purposes[i].

[i] 42 USCS § 6865.

Inside Energy Law