FERC Issues New Final Direct Rule Implementing Executive Order on Regulatory Sunsetting

On October 1, 2025, the Federal Energy Regulatory Commission (FERC or the Commission) issued Order No. 914 amending certain Commission regulations to incorporate a conditional sunset date in compliance with the Trump administration’s April 2025 Executive Order, “Zero-Based Regulatory Budgeting to Unleash American Energy” (the EO).

Akin is pleased to serve as a gold sponsor for Infocast’s Energy Independence Summit in Houston, October 21-23. Energy partner Charlie Ofner will moderate the Macroeconomics of Domestic Energy Independence panel, projects & energy transition partner Shariff Barakat will lead Opportunities in US Manufacturing: How Big, How Fast, How FEOC?, and counsel Taha Qureshi will guide the discussion on Cornerstones for Energy Independence: Investing in Grid Security & Cybersecurity.

As of October 6, 2025, the Federal Energy Regulatory Commission (FERC) continues to operate despite the lapse in appropriations that resulted in a government shutdown on October 1, 2025. While FERC receives appropriations from Congress, it primarily is self-funded through fees and charges obtained from the industries it regulates, offsetting its total costs. Hence, during prior government shutdowns in 2018 and 2013, the agency was able to continue operations. However, FERC published a plan for operating in the event of a lapse in appropriations on September 30, 2025, available here. 

On September 4, 2025, the Senate Energy and Natural Resources Committee convened a hearing to consider the nominations of Laura Swett and David LaCerte to serve as commissioners at the Federal Energy Regulatory Commission (FERC or Commission). Swett is a former FERC Staff that served as legal and policy advisor to former FERC Chairman Kevin McIntyre and Commission Bernard McNamee. LaCerte is an attorney in private practice that previously held positions at the Chemical Safety and Hazard Investigation Board and the Louisiana Department of Veterans Affairs.

On August 29, 2025, Christopher Wright, the Secretary of the U.S. Department of Energy (DOE) submitted a proposal to the Federal Energy Regulatory Commission (FERC) under section 403 of the Department of Energy Organization Act (DOE Organization Act), asking that FERC terminate its long-running proceeding in Docket No. PL18-1, which addresses proposed updates to its policy statement on the Certification of New Interstate Natural Gas Facilities. The docket resulted in a draft policy statement that has never been finalized, nor relied upon by FERC in a published order, but would require FERC to consider environmental impacts and potential mitigation prior to making a public interest determination under the Natural Gas Act (NGA). The Secretary asks FERC to rescind the draft policy statement in its entirety to remove any uncertainty in gas infrastructure development. Rescission would require FERC to initiate a new docket and develop a new record should it want to reinitiate similar policy changes in the future.

On August 8, 2025, the Federal Energy Regulatory Commission (FERC) issued an enforcement order in Skye MS, LLC (Skye) and levied a $45,000 civil penalty on an intrastate pipeline operator in Mississippi, resolving an investigation into the operator’s violations of section 311 (Section 311) of the Natural Gas Policy Act (NGPA). FERC faulted the operator for providing a Section 311 transportation service without timely filing a Statement of Operating Conditions (SOC) and obtaining FERC’s approval for the transportation rates. Section 311 permits intrastate pipelines to transport interstate gas “on behalf of” interstate pipelines without becoming subject to FERC’s more extensive Natural Gas Act (NGA) jurisdiction, but requires the intrastate pipeline to have an SOC stating the rates and terms and conditions of service on file with FERC within 30 days of providing the interstate service. Under the NGPA, Section 311 rates must be “fair and equitable” and approved by FERC. In Skye, FERC stated that the operator began providing Section 311 service on certain pipeline segments in Mississippi in May 2023, following their acquisition from another Section 311 operator, but did not file an SOC with FERC until April 2025. The order ties the penalty to the approximately two-year delay between commencement of the Section 311 service and the SOC filing date. The pipeline operator was also ordered to provide an annual compliance report and to abide by additional verification requirements related to the filing of its FERC Form No. 549D, the Quarterly Transportation & Storage Report for Intrastate Natural Gas and Hinshaw Pipelines.

In Sierra Club v. FERC, No. 24-1199 (D.C. Cir. Aug. 1, 2025), the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) upheld the Federal Energy Regulatory Commission’s (FERC) approval of a 1,000-foot natural gas pipeline segment crossing the United States-Mexico border (the Border Pipeline) under section 3 of the Natural Gas Act (NGA), rejecting environmental groups’ challenges that FERC improperly limited its analysis under both the NGA and the National Environmental Policy Act (NEPA), as related to a 155-mile intrastate “Connector Pipeline” constructed upstream of the Border Pipeline in Texas.

On July 15, 2025, the Federal Energy Regulatory Commission (FERC or Commission) issued an order¹ proposing to eliminate the soft price cap of $1,000 per megawatt-hour (MWh) for bilateral spot sales in the Western Electricity Coordinating Council (WECC) that was implemented following the California energy crisis. If adopted, the Commission’s proposal would eliminate the requirement that sellers make a filing with FERC cost justifying spot market sales in excess of the soft price cap, which have become increasingly common in recent years as market conditions have continued to tighten throughout the West. Eliminating the WECC soft price cap would provide sellers that make sales during periods when prices exceed the cap greater certainty that their sales will not be second guessed after the fact.