Jurisdiction for the electricity sector in the United States is divided between federal, state, and local jurisdiction. The jurisdictional divide between federal and state jurisdiction was established through the Federal Power Act (FPA) in 1935. On the federal side, the Federal Energy Regulatory Commission (FERC) - an independent federal agency - regulates the interstate transmission of electricity, natural gas, and oil. Public utility commissions in the states regulate retail rates and distribution services. Local governments in many states are responsible for siting and permitting as well as environmental impact regulation.​

Some parts of the United State (the Northeast, Midwest, Texas, and California) are restructured competitive markets. These markets are run by independent system operators (ISOs) or regional transmission organizations (RTOs). The wholesale markets that encompass multiple states (with the exception of the Texas RTO, the Electric Reliability Council of Texas—or ERCOT) are regulated by FERC. FERC has oversight of all wholesale power transactions on the two large, interconnected grids: the eastern and western interconnects.​

The rapid changes in the electricity sector over the past decade have increasingly blurred the formerly bright line between federal and state jurisdiction. As issues such as the participation of distributed energy resources in the wholesale markets and the treatment of state and federal subsidies in the regulatory construct are being adjudicated by FERC, it is important for State Energy Offices and state governments to understand how proceedings at FERC are impacting state energy policy and state energy planning.​

NASEO supports State Energy Offices by providing resources and information on ongoing proceedings at FERC and on wholesale market issues through webinars and research. 

  • Electricity Markets Education Initiative

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    The Electricity Markets Education Initiative provides participating State Energy Offices with information, analysis, and technical support in understanding how resiliency, reliability, regional resource adequacy, and regional planning function within different wholesale electricity market constructs.

    The project has four goals:

    1. To enable states outside of an RTO/ISO to understand policy decisions made within an RTO/ISO that can have broad regional reliability and resource adequacy implications;
    2. To inform and educate key decision-makers, such as State Energy Offices, to understand and evaluate different proposed market structures and resource adequacy constructs in non-RTO/ISO regions to understand how any market construct implemented in the future could affect state and regional goals;
    3. To examine how state-level integrated resource planning can be coordinated with broader regional plans to enable states’ successes; and
    4. To engage local governments and other stakeholders (such as the private sector and community groups) that State Energy Offices interact with on resilience, reliability, and market issues.

    The project is guided by an Advisory Group, which provides overall leadership, direction, and input to the project.

    Additional Resources:

    • Southeast Regional Cohort Meeting, May 28, 2025 (Presentation)
    • West Regional Cohort Meeting, May 29, 2025 (Presentation)

  • Other Resources

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