Earlier this week, President Trump issued an Executive Order (EO) (titled Ensuring Accountability for All Agencies) aimed at consolidating more power within the Oval Office. This EO specifically targets independent agencies, including the Federal Energy Regulatory Commission (FERC). It mandates that the chairs of these agencies align with the Executive Branch’s policy priorities and submit “all proposed and final significant regulatory actions” to the Office of Information and Regulatory Affairs (OIRA), which operates under the president’s authority. This move effectively grants the White House greater control over FERC’s policymaking, undermining Congress’ original intent to shield independent agencies like FERC from political influence.
FERC was established by Congress as an independent agency in 1977 in order to maintain separation of powers between the three branches of government. This was meant to underscore the necessity of shielding FERC from political influence–a principle that remains just as relevant today.
FERC carries out fundamental functions that underpin our energy system, including regulating the interstate transmission energy, licensing hydropower projects, and regulating interstate wholesale power markets. It ensures that energy sources of all forms can be transmitted over long distances, that wholesale electricity is priced competitively, that our electric grid operates reliably, and that LNG terminals operate safely.
At its core, FERC safeguards the fairness and efficiency of critical energy infrastructure. Preserving its independence is essential to ensuring that decisions regarding our energy infrastructure are driven by expertise and long-term needs, rather than shifting political agendas or outside influence.
Like many of the Trump Administration’s recent EOs, this one is likely to create confusion and face legal challenges. Both outcomes could slow FERC’s critical work, increase uncertainty for the entities it regulates, and expose the Commission to additional legal disputes over any work it manages to complete.
The practical implications of this seemingly straightforward EO could be far-reaching and detrimental to FERC’s core functions. One major concern is that requiring adherence to the Executive Branch’s policy priorities could introduce undue political interference into FERC’s policymaking. This is particularly relevant for long-anticipated and necessary regulatory efforts, such as a rulemaking on interregional cost allocation and transmission planning, which could be deprioritized in favor of a more gas-centric agenda.
Additionally, if congressional mandates to FERC–such as those that were proposed in the unsuccessful EPRA legislation from the 118th Congress–conflict with the Trump Administration’s policy direction, it remains unclear how FERC would navigate these competing obligations.
Regarding the alignment of priorities, the newly-seated FERC Chairman, Mark Christie, has briefly commented on the EO, stating: “why would any commission initiate a big, sweeping regulation that’s contrary to what a presidential administration wants?” However, recent history suggests that FERC has exercised its independence in the past, even when pressured by the Trump Administration.
A notable example occurred during the first Trump Administration when the Department of Energy, under Secretary Rick Perry, attempted to direct FERC to implement a rule that would effectively subsidize power generators capable of storing up to 90 days of fuel onsite (i.e., coal and nuclear plants). FERC unanimously rejected the proposal, prioritizing its duty to protect consumers from undue cost burdens over aligning with the administration’s policy goals. Christie’s statement, combined with the mandates of the new EO, raise serious concerns about whether FERC would maintain the same level of independence in this administration.
In the face of growing electricity demand, reliability challenges, and mounting evidence that our electric grid must expand rapidly, the Trump Administration’s attempt to overpower independent agencies like FERC only exacerbates the pressing issues facing our energy system. FERC’s critical duties stabilize our energy markets and protect ratepayers, and its commissioners should not be subject to the shifting priorities of any president. It is imperative that those with the authority to check executive power– particularly Congress–take action to safeguard FERC from this potentially damaging executive order.