Federal Power Act of 1920
The Federal Power Act of 1920 was a pivotal piece of legislation that established the Federal Power Commission (FPC), one of the early federal regulatory bodies focused on hydropower development and environmental oversight in the United States. Following nearly two decades of advocacy by conservationists, the act aimed to ensure optimal use of the nation's water resources while facilitating the development of hydroelectric power, which was seen as a clean energy source. The legislation was also crucial for addressing complex issues related to water rights and navigation across various types of federally controlled waters.
Prior to the act, the process for issuing permits for hydroelectric development was fragmented and managed by different federal agencies, which created inconsistencies and vulnerabilities, particularly highlighted by a significant permit revocation incident in 1909. The Federal Power Act centralized this authority within the FPC, enabling it to license hydropower projects and safeguard federally protected lands and waterways. Over time, the focus of the FPC evolved from merely engineering assessments to incorporating environmental considerations, especially following the amendments introduced by the Federal Power Act of 1935. This act further expanded the FPC's role, ultimately leading to its transition into the Federal Energy Regulatory Commission in 1977 under the Department of Energy, broadening its regulatory scope to include natural gas and oil.
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Federal Power Act of 1920
Identification: The Law: Federal legislation that created the Federal Power Commission
Also known as: Federal Water Power Act
Date: Enacted on June 10, 1920
The Federal Power Commission (FPC), which was established by the Federal Power Act of 1920, was one of the first federal regulatory agencies created to oversee an environmental issue: the development of hydroelectric power.
The Federal Power Act was the result of almost twenty years of lobbying by conservationists, who wanted to ensure that hydropower development would make the best use of the nation’s water resources. Advocates for hydroelectricity believed that it would provide clean energy and pushed for legislation to ensure its development.
Legislation was also needed to resolve issues regarding water rights and navigation. The federal government had jurisdiction over three types of waters in the United States: navigable waters, waters located in federal reserves, and waters subject to international treaties, such as the Niagara River between the United States and Canada. Oversight of those waters was divided among multiple cabinet departments.
The first functional hydroelectric plant in the United States began operating in 1881. As the size of electricity-generating technology grew, so did the legal questions around hydropower development. Under the existing system, permits for development of power sites on federally controlled waters were issued by the agencies and departments responsible for specific sites; for example, the Forest Service issued permits for development within a national forest. This system worked for many years with only minor problems. Although permits were issued at the discretion of the federal government and were revocable at any time without cause, few permits had ever been revoked. Then, in 1909, Secretary of the Interior James R. Garfield revoked forty permits in one day, effectively demonstrating the need for comprehensive regulatory legislation.
Despite this, it was not until June 10, 1920, that the Federal Power Act became law. The act established the Federal Power Commission (FPC), an interdepartmental body consisting of personnel from several government departments, which would be solely responsible for licensing hydropower developments on federal waterways. The FPC was also charged with ensuring that developments did not threaten either the integrity of federally protected lands, such as American Indian reservations or national forests, or the navigability of U.S. waters.
Impact
Although conservationism had originally been the driving force behind the passage of the act, the FPC’s focus soon shifted to determining if a proposed project met engineering, rather than environmental, criteria. The Federal Power Act of 1935 amended the scope of the FPC’s responsibilities, changing it into an independent regulatory agency with dedicated personnel and instituting additional criteria for granting licenses, including a renewed emphasis on environmental concerns. In 1977, the FPC was incorporated into the newly created Department of Energy, renamed the Federal Energy Regulatory Commission, and granted even broader responsibilities, including jurisdiction over natural gas and oil trade.
Bibliography
Baum, Robert D. The Federal Power Commission and State Utility Regulation. Washington, D.C.: American Council on Public Affairs, 1942.
Federal Energy Regulatory Commission. Students’ Corner. http://www.ferc.gov/students/whatisferc/history.htm.
Hay, Duncan. Hydroelectric Development in the United States, 1880–1940. Washington, D.C.: Edison Electric Institute, 1991.