Federal Power Acts

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Federal Power Acts

Brian E. Gray

Article I, Section 8 of the United States Constitution grants Congress authority to "regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." Historically, the commerce clause has been the greatest source of Congress's constitutional power to enact laws that govern economic and social activity within the United States.

Many Supreme Court decisions of the early nineteenth century that sanctioned the expansion of federal regulatory power involved protection of navigation. In the famous case Gibbons v. Ogden (1824), for example, Chief Justice John Marshall declared that the "power over commerce, including navigation, was one of the primary objects for which the people of America adopted their government." In subsequent cases, the Court recognized that the United States has paramount authority to protect and to regulate all navigable waters to ensure that they remain free and unobstructed avenues of commerce.

During the late nineteenth and early twentieth centuries, Congress passed a series of statutes to govern the use of the nation's navigable waterways. The Rivers and Harbors Act of 1890, for example, prohibited "the creation of any obstruction not affirmatively authorized by Congress, to the navigable capacity of any of the waters of the United States." In the Federal Water Power Act of 1920 (41 Stat. 1063), Congress enacted the first general law to regulate the use of navigable rivers for the generation of hydroelectric power.


As the Supreme Court has explained (Federal Power Commission v. Union Electric Co. [1965]), the "central purpose of the Federal Water Power Act was to provide for the comprehensive control over those uses of the Nation's water resources in which the Federal Government had a legitimate interest; these uses included navigation, irrigation, flood control, and, very prominently, hydroelectric poweruses which, while unregulated, might well be contradictory rather than harmonious." Congress believed that the earlier Rivers and Harbors Acts were inadequate because they focused exclusively on protection of the federal interest in navigability. In contrast, the Federal Water Power Act "was the outgrowth of a widely supported effort of the conservationists to secure enactment of a complete scheme of national regulation which would promote the comprehensive development of the water resources of the Nation, in so far as it was within the reach of the federal power to do so" (First Iowa Hydro-Electric Coop v. FPC [1946]).

The act created a Federal Power Commission, now called the Federal Energy Regulatory Commission, and granted it exclusive authority to license the construction and operation of hydroelectric projects on the navigable waterways of the United States. The statute authorizes the Commission:

To issue licenses to citizens of the United States, or to any association of such citizens, or to any corporation organized under the laws of the United States or any State thereof, or to any State or municipality for the purpose of constructing, operating, and maintaining dams, water conduits, reservoirs, power houses, transmission lines, or other project works necessary or convenient for the development and improvement of navigation and for the development, transmission, and utilization of power across, along, from, or in any of the streams or other bodies of water over which Congress has jurisdiction under its authority to regulate commerce with foreign nations and among the several States, or upon any part of the public lands and reservations of the United States (including the Territories), or for the purpose of utilizing the surplus water or water power from any Government dam.

If any part of a proposed hydroelectric project would be located within the boundaries of a federal reservation (such as a national forest or Native American reservation), the commission must ensure that the project "will not interfere or be inconsistent with the purpose for which such reservation was created or acquired." In addition, if the project might affect the "navigable capacity" of the waters of the United States, the act prohibits the commission from granting a license until the plans for the project have been approved by the Army Corps of Engineers (the federal agency with principal jurisdiction over protection of navigability). The terms of new and renewed licenses are thirty to fifty years.

As the number of America's rivers being used as sources of hydroelectric power has increased, and as public values have changed over time, Congress has amended the Federal Water Power Act to broaden its original utilitarian purpose of promoting the development of hydroelectric power. The two most important amendments occurred in 1935 and 1986.


In the Federal Power Act of 1935 (49 Stat. 803), Congress changed the Federal Power Commission from an interdepartmental body (composed of the secretaries of the Agriculture, Interior, and War Departments) to an independent regulatory agency with five members appointed by the president and confirmed by the Senate. Congress also granted the new Federal Power Commission authority over both the interstate transmission of electricity and the sale of hydroelectric power at the wholesale level. The act requires the commission to ensure that electricity rates are "reasonable, nondiscriminatory and just to the consumer."

The Federal Power Act of 1935 also amended the criteria that the commission must apply in deciding whether to license the construction and operation of new hydroelectric facilities. In addition to evaluating the need for additional power and the capabilities of the applicant, the commission also must determine that the project "will be best adapted to a comprehensive plan for improving or developing a waterway or waterways for the use or benefit of interstate or foreign commerce, for the improvement and utilization of water-power development, and for other beneficial public uses, including recreational purposes."


Although the Supreme Court has held that this directive to consider "other beneficial public uses" included protection of native fish populations, Congress enacted the Electric Consumers Protection Act of 1986 (ECPA) (100 Stat. 1243) to make this protection explicit. The statute also broadened the commission's authority to protect the recreational uses of the nation's rivers, fish and wildlife, and other environmental values. As amended by ECPA, the Federal Power Act now provides that, "in addition to the power and development purposes for which licenses are issued," the Federal Energy Regulatory Commission "shall give equal consideration to the purposes of energy conservation, protection, mitigation of damages to, and enhancement of, fish and wildlife (including related spawning grounds and habitat), the protection of recreational opportunities, and the preservation of other aspects of environmental quality."


Today, there are approximately 250,000 hydroelectric projects that operate with licenses issued under the Federal Power Act. Although these facilities account for only about 10 percent of the United States' power-generating capacity, they produce more than 95 percent of the nation's renewable energy, such as solar power, wind assisted power, and power generated by flowing water. As the original fifty-year licenses for the early hydroelectric projects have expired over the past two decades, the mandate that the Federal Energy Regulatory Commission give "equal consideration" to power production and environmental interests has had two important consequences: most of the new licenses include conditions to protect fish, wildlife, water quality, and recreational uses that may be adversely affected by project operations; and a number of old projects have been decommissioned and removed because they could no longer operate profitably under the new regulatory regime. The number of decommissioned dams is close to 500.

See also: fish and Wildlife Conservation act of 1980; Tennessee Valley Authority Act.


American Rivers. Dam Removal Success Stories. Washington, DC: American Rivers, 1999.

Coggins, George Cameron, Charles F. Wilkinson, and John D. Leshy. Federal Public Land and Resources Law, 4th ed. New York: Foundation Press, 2001.

Echeverria, John, Pope Barrow, and Richard Roos-Collins. Rivers at Risk. Covelo, CA: Island Press, 1990.

Federal Energy Regulatory Commission. Hydropower: The Use and Regulation of a Renewable Resource. <http://www.ferc.gov/hydro/hydro2.htm>.

Pros and Cons of Hydroelectric Power

The United States has come to rely heavily on hydroelectric power because it is a safe, clean, reliable method of generating large amounts of energy. Water-generated power does not burn fossil fuels; in addition, reservoirs created for use by hydroelectric plans can provide recreational opportunities and serve as a steady source of water for agriculture. However, critics point out that hydropower can cause extensive environmental damage. Dams alter the natural flow of rivers, degrade water quality, and prohibit the migration of fish. Ecosystems can be damaged by flooding, and reservoirs can alter the pressure on the Earth's crust and trigger earthquakes.

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Federal Power Acts

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Federal Power Acts