FERC Rejection of Coal Subsidies Proposal Demonstrates Importance of Independent Agencies

by James Goodwin | January 09, 2018

On January 8, the Federal Energy Regulatory Commission (FERC) struck a resounding blow against the Trump administration's ill-advised agenda to put its thumb on the scale of the energy market by propping up the coal industry, unanimously rejecting a controversial proposal by Department of Energy (DOE) Secretary Rick Perry. Perry's plan would have resulted in working families and small businesses subsidizing the coal industry to the tune of hundreds of millions or even billions of dollars. Dozens of energy policy experts have explained the substantive issues of this action, but I want to focus on an important procedural matter – namely, how this episode demonstrates the importance of guarding the actual independence of independent regulatory agencies like FERC. 

FERC is among a class of federal administrative agencies that Congress specially designed to be reasonably "independent" from political interference by the president, hence the moniker "independent regulatory agencies." Other such agencies include the Securities and Exchange Commission, the Nuclear Regulatory Commission, and the Consumer Financial Protection Bureau. 

In creating these agencies, Congress recognized that their missions were too important and involved policy matters too technically complex to leave them unduly vulnerable to the vagaries of wanton political scheming. Instead, Congress sought to ensure that as much as possible, sound, expertise-driven policymaking carried the day. 

FERC illustrates the importance of this design. Its mission involves overseeing the production and distribution of energy resources in a way that balances ...

President Obama's Puzzling New Executive Order: Should the Consumer Financial Protection Bureau Really be Spending Its Precious Time and Resources Weakening Existing Regulations?

by Thomas McGarity | July 13, 2011
On Monday, the White House announced that President Obama had signed a new executive order on federal regulation to supplement January’s executive order to executive branch regulatory agencies. The new executive order is aimed at the “independent agencies,” so named because the heads of those agencies do not serve at the pleasure of the president. By statute, they serve for a term of years and can be removed from office only “for cause,” which usually means misbehavior unrelated to the exercise of ...

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