Future Business Leaders of America (FBLA) Business Law Practice Exam

What is the primary function of the Federal Energy Regulatory Commission (FERC)?

1. To regulate environmental policies

2. To oversee federal employee policies

3. To regulate electricity and natural gas

4. To manage international trade

The correct answer is: To regulate electricity and natural gas

The primary function of the Federal Energy Regulatory Commission (FERC) is to regulate the interstate transmission and sale of electricity and natural gas. Established by the Federal Power Act, FERC plays a crucial role in ensuring that energy markets operate fairly and efficiently. This includes overseeing the licensing of hydroelectric projects, setting rates for electricity transmission, and ensuring that consumers have access to reliable energy at reasonable prices. FERC is particularly focused on issues related to the energy industry, such as overseeing the infrastructure that moves energy from producers to consumers, thereby ensuring that competition exists in the markets for electricity and natural gas. This regulatory authority is vital for maintaining an effective balance between supply and demand and for fostering innovation in energy technologies. The other options are not applicable to FERC. The agency does not have the authority to regulate environmental policies directly, oversee federal employee policies, or manage international trade, which are functions typically assigned to different governmental agencies or departments.