"The federal government regulates US electricity." Not really.
The most common mistake in US energy reporting is treating FERC as if it were the regulator of US electricity. FERC matters, but it does not set your bill. The Federal Power Act of 1935 carved a narrow federal lane (wholesale sales in interstate commerce and interstate transmission) and left everything else to the states. Retail rates, default-service procurement, distribution rate cases, supplier licensing, customer-protection rules, billing complaints: all state PUC or PSC, in every state, since 1907.
One bill therefore answers to two regulators. The wholesale supply that flows through your meter is regulated by FERC (or, in Texas, by PUCT alone). The delivery line, the distribution capex, the supplier you contract with, the rate at which you actually pay: all set by your state PUC. A FERC ruling rarely moves your bill directly; it changes the wholesale input that your state PUC and your incumbent then turn into a retail rate.
Two more agencies complicate the picture. NERC writes mandatory reliability standards under FERC delegation; its audits do not show up on your bill but they shape what your utility has to spend on grid resilience. EPA regulates power-plant emissions; the cost of compliance with Cross-State Air Pollution Rule, MATS, and GHG performance standards is recovered through state PUC rate cases. The Department of Energy does research, runs LIHEAP through HHS-ACF, and runs the national labs; it does not regulate retail anything.
Read the next sections with this model in mind: federal sets the wholesale floor, state PUC sets your retail rate, ERCOT is its own thing. Anyone who tells you "the federal government regulates US electricity" has not read the Federal Power Act.
Five regulators, five jobs, one bill.
Each agency has a narrow remit set by statute. The Federal Power Act gives FERC the wholesale + interstate lane; the rest belongs to the states or to specialised agencies.
FERC
5 commissioners, 4-year staggered terms, no more than 3 from one party. Wholesale electricity sales, interstate transmission, interstate natural-gas pipelines, hydroelectric licensing, NERC oversight. Decides RTO/ISO market-rule filings, capacity-auction parameters, transmission cost allocation. Does NOT set retail rates.
State PUC / PSC
3 to 7 commissioners per state. Sets retail rates through general rate cases. Approves utility mergers, certificates of need, integrated resource plans, special-purpose riders. Licenses competitive suppliers in retail-choice states. Handles consumer complaints, slamming, deceptive marketing. This is the regulator that actually sets your bill.
NERC
Non-profit corporation, mandatory authority delegated by FERC under EPAct 2005. Writes Reliability Standards (frequency response, vegetation management, cybersecurity, planning reserve margins). 6 Regional Entities audit utility compliance and assess penalties (up to $1M/day/violation).
DOE
Cabinet department. Funds research (national labs), runs the Strategic Petroleum Reserve, manages the Loan Programs Office, administers LIHEAP funding (delivered through HHS-ACF and state offices). EIA (Energy Information Administration) is the statistical arm and the source for every ¢/kWh number you see cited.
EPA
Sets clean-air rules on fossil power plants under the Clean Air Act. Cross-State Air Pollution Rule (CSAPR), Mercury and Air Toxics Standards (MATS), GHG New Source Performance Standards. Compliance costs are recovered by utilities through state PUC rate cases.
Consumer advocate
State-funded office or non-profit. Cross-examines utility rate cases on behalf of residential ratepayers. NC Public Staff, OUCC (OH/IN), OCA (PA), CUB (IL non-profit), NJ Rate Counsel, MD OPC, DC OPC. Frequently negotiates settlements that lower the rate increase the utility asked for.
The non-obvious truth. FERC sets the rules that price 100% of the wholesale electrons moving on the grid, but it sets the rate of 0% of US retail bills. Every cent on your bill is approved by your state PUC, in a state-specific rate case, after public hearings, after consumer-advocate cross-examination. If you want to move the number on your bill, the state PUC docket is the only meaningful lever.
Which agency does what, and how you participate.
Each agency has a defined statutory remit. The "how to participate" column is the practical route to influence each one.
| Agency | Jurisdiction | Typical decision | How to participate |
|---|---|---|---|
| FERC | Wholesale electric sales, interstate transmission, interstate gas pipelines, hydro | RTO market-rule filings, capacity-auction parameters, pipeline certificates | eFile comment on docket; attend monthly open meeting (streamed) |
| State PUC / PSC | Retail rates, in-state utility operations, supplier licensing | Rate case, merger approval, IRP, supplier license, complaint | Public comment, attend in-territory public hearing, file expert testimony |
| NERC | Mandatory reliability standards under FERC delegation | Reliability Standard drafting, compliance audit, penalty | Comment during standards development process (ballot pool) |
| DOE | Research, LIHEAP funding, SPR, loan programs, EIA stats | Grant award, loan guarantee, LIHEAP allocation, IECC building code | Federal Register notice + comment; congressional appropriations |
| EPA | Power-plant air emissions (CSAPR, MATS, GHG NSPS) | New Source Performance Standard, State Implementation Plan | Federal Register notice + comment; petition for reconsideration |
| Consumer advocate | State residential and small-business ratepayer interests | Cross-examination, expert testimony, settlement | Email or letter describing bill impact; attend rate-case hearing |
| PUCT (Texas only) | Both wholesale (ERCOT) and retail in Texas (state-jurisdictional) | ERCOT protocol changes, REP rules, $5,000/MWh cap, TDU rate case | PUCT docket comment, ERCOT stakeholder process |
! NARUC: not a regulator, but the venue
The National Association of Regulatory Utility Commissioners (NARUC) is the trade association for state PUCs and PSCs. It does not regulate anything, but it is where state commissioners coordinate, draft model rules, and meet FERC staff. Its winter, summer and annual meetings produce most of the cross-state policy alignment you eventually see in state rule changes. Worth knowing about; not where to file a comment.
How a FERC ruling actually reaches a residential bill.
A FERC decision rarely shows up directly on your bill. It changes the wholesale input that your incumbent buys, which the state PUC then approves the recovery of through a rate or rider. Four typical steps.
A FERC approves the market design
FERC orders set the wholesale market rules: Order 888/889 (1996) opened transmission, Order 2000 (1999) defined RTOs, Order 2222 (2020) opened DER aggregation. PJM, MISO, NYISO, ISO-NE, SPP, CAISO file market rules under those orders; FERC approves or rejects.
B The RTO runs the auction
PJM clears its Base Residual Auction at $329.17/MW-day on 22 July 2025. NYISO ICAP auctions clear monthly. ISO-NE Forward Capacity Market clears annually. The wholesale clearing price is a direct output of FERC-approved market rules.
C The incumbent bills the wholesale charge
The incumbent owes its zonal share of the RTO's capacity bill (PJM zonal allocation, ISO-NE FCM allocation, etc.). The state PUC has typically pre-approved a tariff rider or capacity-pass-through line that lets the incumbent recover it from customers without a new rate case.
D The state PUC reviews and signs off
Each state PUC reviews the calculation, sometimes opens an investigation if the impact is large (as happened in MD, NJ and DC after the July 2024 PJM auction). The rider lands on bills in the next billing cycle, or in the next default-service procurement, depending on the state.
The takeaway: FERC sets the rules, the RTO runs the auction, the incumbent collects, the state PUC reviews. Each regulator owns a slice and only a slice. If you want to challenge a wholesale rule, you file at FERC. If you want to challenge how the bill recovers it, you file at the state PUC.
Why ERCOT lives outside FERC, and what changed on 5 December 2025.
ERCOT is the only US ISO that is not regulated by FERC. The legal reason: the Federal Power Act gives FERC jurisdiction over interstate commerce only, and the ERCOT grid does not cross state lines. The practical consequence: the PUCT alone regulates both wholesale and retail in ERCOT, which is why Texas can run rules no other US market can.
Day-ahead $/MWh cap
ERCOT system-wide offer cap, day-ahead market. Set after Winter Storm Uri (Feb 2021), retained under RTC+B.
Real-time $/MWh cap
Real-time market cap under RTC+B (5 Dec 2025). Drops to $2,000 if the high cap is hit for 12 hours in 24.
FERC rulings on ERCOT
FERC has no direct authority over ERCOT market rules. PUCT alone approves; ERCOT board adopts.
RTC+B launched
Real-Time Co-Optimization plus Batteries. PUCT-approved redesign that prices storage in real time and splits the offer cap.
Three implications of the ERCOT-outside-FERC structure
- A No FERC capacity-auction floor in Texas. ERCOT does not run a capacity market; it relies on scarcity pricing in the spot market to fund new generation. PJM and ISO-NE could not legally adopt the ERCOT design without FERC approval; ERCOT could adopt it because the PUCT could approve it alone.
- B Winter Storm Uri (Feb 2021) was a state-jurisdictional event. The $9,000/MWh cap that compounded the crisis was a PUCT rule, not a FERC rule. The post-Uri cap reduction to $5,000/MWh in 2022 was a PUCT rule. RTC+B was a PUCT rule. FERC could investigate generator failures under reliability standards (NERC delegation) but could not change the market design.
- C Public participation in ERCOT is through the PUCT. A FERC eFile does not affect ERCOT. You comment on a PUCT docket, intervene through the Office of Public Utility Counsel (state consumer advocate), or participate in the ERCOT stakeholder process (Technical Advisory Committee + working groups).
Four reasons the US has the world's most fragmented energy regulator.
Most OECD countries have one national energy regulator. The US has 50 state PUCs plus FERC plus NERC plus DOE plus EPA plus PUCT-on-its-own. Four reasons explain the structure, and why it is unlikely to consolidate.
The Commerce Clause limits federal reach
The Federal Power Act of 1935 carved a narrow federal lane around interstate commerce because the Supreme Court was, in the same decade, repeatedly striking down broader federal economic interventions. The "wholesale + interstate" line is a constitutional compromise that has never been redrawn. ERCOT exists in part because Texas designed its grid to avoid it.
State PUCs predate the federal regulator
Wisconsin and New York stood up the first state PSCs in 1907; FPC (FERC's ancestor) was not created until 1920 and did not get wholesale jurisdiction until 1935. By that point every state had its own commission, its own statutes, its own commissioners. A federal pre-emption of retail would face 50 simultaneous state-court challenges.
Single-issue agencies were grafted on later
NERC was a voluntary industry body from 1968 until EPAct 2005 gave FERC the authority to delegate mandatory reliability standards to it. EPA got Clean Air Act authority over power plants only after the 1970 amendments and the 1990 amendments. DOE was created from the AEC in 1977. Every agency overlaps another because each was created to fix a problem the existing structure could not.
Local politics never wanted to give up retail
Retail rate cases are intensely local: every state PUC commissioner is appointed (or in some states elected) within state politics. Surrendering retail to FERC would mean surrendering the most visible consumer-protection lever a governor has. No state has ever proposed it. Every effort to "rationalise" US energy regulation has stalled at the federal-state boundary.
The takeaway: the fragmented structure is not an accident of history; it is a constitutional, statutory and political equilibrium. The agencies overlap by design. Understanding which one to file at is the single most useful piece of regulatory literacy a US energy customer can develop.
Six concrete things you can do with this map.
Identify your state PUC first
Your retail bill is set there. NY (DPS), CA (CPUC), TX (PUCT), IL (ICC), PA (PaPUC), OH (PUCO), MA (DPU).
Sign up for rate-case alerts
Every state PUC has a docket-alert system or RSS feed. Subscribing to your incumbent's rate-case docket gives you advance notice of every filing, hearing and order, free.
Contact your consumer advocate
If your bill jumps, email your state's ratepayer-advocate office. They cross-examine the utility on your behalf and use customer narratives in testimony. NC Public Staff, OUCC, OCA, CUB, NJ Rate Counsel, MD OPC, DC OPC, Massachusetts AGO.
Apply for LIHEAP if you qualify
DOE funds LIHEAP through HHS-ACF; states administer it through DHS, Community Action agencies or designated non-profits. Eligibility typically 150 to 200% of federal poverty level; benefits 200 to 1,000+ per year.
Use EIA, not utility marketing
EIA Electric Power Monthly Table 5.6.A is the gold-standard residential-rate source. Always cross-check any "average rate" or "savings" claim against the EIA number for your state. The May 2026 US average was 18.83 ¢/kWh.
In Texas, route through PUCT
A FERC filing has zero effect on ERCOT rules. PUCT docket comment, Office of Public Utility Counsel intervention, ERCOT stakeholder Technical Advisory Committee are the only routes. Power to Choose handles REP shopping.
Common questions about US energy regulators.
Two regulators in parallel. The FERC regulates wholesale electricity sales and interstate transmission. Your state's PUC / PSC regulates retail rates and any utility case (rate case, merger, line build, certificate of need) that stays inside the state. FERC has 5 commissioners appointed by the President; state PUCs have 3 to 7 commissioners, appointed by the governor in most states, elected in a handful (AL, AZ, GA, LA, MS, MT, NE, ND, NM, OK, SC, SD). One physical bill therefore answers to two regulators: wholesale supply to FERC, delivery to the state PUC.
Five core jobs per the FERC about page: (1) regulate wholesale electricity sales in interstate commerce, (2) regulate interstate transmission of electricity, (3) regulate interstate natural-gas pipelines and storage, (4) license hydroelectric projects on navigable waters, (5) oversee mandatory reliability standards delegated to NERC. FERC also decides RTO / ISO market-rule filings, capacity-auction parameters (Net CONE caps, etc.) and the cost allocation of new interstate transmission. FERC does NOT regulate retail rates, retail suppliers, ERCOT-internal rules, municipal or co-op rates, or LIHEAP.
Sets your retail rate. Approves or rejects every general rate case (typically every 3 to 5 years per utility), every special-purpose rider (storm-cost recovery, AMI deployment, EV-charger infrastructure, undergrounding), every merger or acquisition, every certificate of public convenience and necessity for a new line or plant, every utility integrated resource plan. In retail-choice states the PUC also licenses competitive suppliers, runs consumer-complaint processes and enforces customer-protection rules (door-to-door sales windows, slamming, cramming, deceptive marketing). The state PUC is where your bill is actually set.
Four different agencies, four different jobs. FERC sets wholesale market rules. NERC sets mandatory reliability standards under FERC delegation and audits compliance. DOE funds research, runs the national labs, administers LIHEAP through HHS-ACF, manages the Strategic Petroleum Reserve and Loan Programs Office. EPA sets clean-air rules on power-plant emissions (Cross-State Air Pollution Rule, MATS, GHG performance standards). None of them sets your retail rate; only the state PUC does that.
Because the ERCOT grid does not cross state lines. The Federal Power Act (1935) gives FERC jurisdiction over interstate commerce in electricity. ERCOT covers most (not all) of Texas, deliberately disconnected from the Eastern and Western Interconnections except through a handful of DC ties that do not move bulk power. That intra-state status means the Public Utility Commission of Texas (PUCT) regulates both wholesale and retail in ERCOT, which is why Texas can run an energy-only market with a $5,000/MWh day-ahead cap and a $2,000/MWh real-time cap under the December 2025 RTC+B redesign.
A state-funded office that intervenes in utility rate cases on behalf of residential and small-business ratepayers. They cross-examine utility witnesses, file expert testimony, and frequently negotiate settlements that lower the proposed rate increase. Examples: NC Public Staff (one of the strongest in the US), OUCC in Ohio and Indiana, OCA in Pennsylvania, CUB in Illinois (consumer non-profit, not state agency but funded by ICC assessment), NJ Rate Counsel, Maryland OPC, DC OPC. Public comment is accepted; many file outcomes are negotiated, not litigated.
Three ways. (1) File a public comment: every state PUC docket has a public-comment process; FERC accepts e-filings via eLibrary. (2) Attend a public hearing: rate-case public hearings are typically held in the utility's service territory; FERC open meetings are streamed monthly. (3) Engage the consumer advocate: send a letter or email describing the bill impact you are seeing; advocates use customer narratives in testimony. None of this requires a lawyer.
Depends on what crosses what. A new in-state distribution feeder: the state PUC decides through a Certificate of Public Convenience and Necessity (CPCN). A new interstate transmission line: FERC + every state PUC it crosses, plus the ISO/RTO planning process. A new interstate gas pipeline: FERC issues the Certificate; FERC also handles eminent-domain authority. A new federal hydro project: FERC issues the license. A new in-ERCOT plant: PUCT + ERCOT alone, no FERC involvement.
Keep learning about US energy regulation
Wholesale electricity markets
The seven US ISO/RTOs, marginal pricing and the July 2025 PJM record auction.
Incumbent electricity suppliers
The legacy utilities that own the wires and provide default supply.
Transmission vs distribution
The two wires layers, why they are billed separately and who is responsible.
Deregulated states map
State-by-state status of electricity and natural gas retail choice.
Competition in US energy markets
PURPA, EPAct 1992, FERC Orders 888, 889 and 2000 in plain English.
How liberalization affects you
What retail choice means for residential customers, state by state.
Distributed energy
Rooftop solar, batteries and EVs as wholesale resources under FERC Order 2222.
Plant to plug: the journey
How your electricity gets from a power plant to the outlet at home.
Electricity prices per kWh
EIA-verified state-by-state residential prices, May 2026.
New York: 1998 to 2026
NYISO, the Reset Order and the role of the NY PSC.
Illinois: ComEd, Ameren and PJM
Why the PJM 2026/2027 auction lands hardest on ComEd customers.
Texas energy hub
ERCOT, the TDUs, retail providers and the PUCT.