Energy laws are the rules that decide where our energy comes from, how it is moved across the electric grid, and what it costs when it reaches our homes. They cover everything from drilling for natural gas to installing rooftop solar energy panels, and they strive to balance three key objectives:

• Ensuring reliable power
• Maintaining fair prices
• Reducing greenhouse gas emissions that contribute to climate change

Understanding these laws and their impact on energy can help you better comprehend how they affect you and your energy needs. Below, we outline how lawmakers, regulators, and courts steer the United States toward reliable, affordable, and increasingly clean energy.

What Is Energy Law and What Sectors Does It Govern?

Energy laws is an umbrella term for federal, state, and local rules that touch every fuel and technology in the energy industry. These laws are understandably far-reaching, so it may be easier to only focus on the laws that impact you.

Traditional fossil fuels, such as coal, oil, and gas, nuclear power, and newer renewable energy resources like wind, solar, hydropower, biomass, and geothermal all live under the energy law umbrella. However, the laws vary significantly between sources, as they may aim to promote renewable energy use while also helping to limit demand on traditional fossil fuels.

Energy laws help decide who can drill an oil or natural gas well, build a power plant, or string high‑voltage wires. They also inform utilities on how to keep customers safe, outline when a company must clean up pollution, and establish targets for energy efficiency and conservation. In short, if it heats, cools, drives, or lights something, energy law likely has a say in it. 

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How Do Federal and State Governments Share Responsibility in Regulating Energy?

In the U.S., there’s a tag-team effort between the federal government and state governments to help create and refine energy laws. Federal laws are broader, more generalized, and cross state lines, whereas state laws can focus more on what is most beneficial for that state’s residents.

Their distinct responsibilities and the agencies responsible for creating these laws are as follows:

• Federal government: Through the U.S. Congress, Department of Energy (DoE), Federal Energy Regulatory Commission (FERC), and other federal agencies, Washington D.C. controls interstate matters. The FERC oversees wholesale power markets and interstate gas pipelines; the Nuclear Regulatory Commission (NRC) licenses reactors and monitors each stage of their operation; and Congress enacts umbrella statutes, such as the Energy Policy Act of 1992 and the Energy Policy Act of 2005.
• State governments: Public Utility or Public Service Commissions (PUCs/PSCs) handle retail rates, approve new power plants, and enforce local energy policy targets. For example, New York’s Public Service Commission has set a goal of 70% renewable electricity by 2030, while Vermont aims for 90% renewable energy use by 2050. The split allows Washington D.C. to keep interstate commerce flowing while states tailor solutions to their local resources and politics.

What Legal Frameworks Support the Development of Renewable Energy Sources?

Several factors come into play when developing laws surrounding renewable resources. However, two tools dominate the process, and they are:

• Money: Federal and state tax incentives, such as the production tax credit for wind and the investment tax credit for solar, reduce upfront costs. States layer on rebates, grants, and low‑interest loans to further spur renewable energy’s development.
• Mandates: Thirty states, plus Washington D.C., Puerto Rico, and Guam, have Renewable Portfolio Standards that require utilities to reach a specific share of clean energy by certain years. Utilities can build their own wind farms or buy Renewable Energy Certificates to comply. Combined, these incentives and standards have helped drive many renewable energy projects to date.

How Do Energy Laws Address Environmental and Climate Change Concerns?

Air quality and climate law provisions weave into nearly every modern energy statute. Classic environmental regulations, such as the Clean Air Act, establish pollution limits for power plant smokestacks. Newer programs target carbon specifically:

• The Energy Independence and Security Act of 2007 tightened vehicle fuel economy standards and increased biofuel blending and the production of other renewable fuels.
• Many states now cap utility carbon emissions or require 100% zero-carbon electricity by mid-century.
• The EPA uses its authority under the Clean Air Act to propose carbon standards for the power sector, encouraging companies to adopt cleaner energy technologies, such as carbon capture or replacing coal with natural gas and renewable energy sources. Environmental justice also matters. Laws now require extra review if a project would add pollution in already‑burdened neighborhoods.

What Are the Permitting and Regulatory Requirements for Energy Infrastructure Projects?

Large infrastructure projects, such as pipelines, LNG terminals, wind farms, and HVDC lines, must navigate a complex permitting process. Some permitting processes they must go through include:

• The National Environmental Policy Act (NEPA) requires detailed studies of wildlife, water, noise, and cultural sites.
• FERC assesses the need, routing, and safety for interstate gas lines or hydropower dams.
• State regulatory boards must weigh local land‑use rules, while counties and cities may add zoning hearings.
• Specialized permits, such as those from the U.S. Army Corps of Engineers for wetlands and the U.S. Coast Guard for offshore wind power, round out the checklist.

Developers complain that the layers can stretch a project over five to 10 years, but communities feel these reviews protect health and ecosystems.

How Are Utility Companies Regulated Under Energy Law?

Most electric and gas delivery systems are natural monopolies, as stringing duplicate wires or pipes would be wasteful, giving utility companies exclusive territories. In return, they must adhere to specific regulations, such as:

• Provide safe, universal service.
• Submit spending plans and profit targets to the PUC.
• Meet reliability and energy efficiency standards.

Set energy rates using public “rate cases” where regulators audit expenses and allow a reasonable return so the utility can attract investment without overcharging.

Many states have launched some form of retail energy choice. In these deregulated energy markets, the utility company still owns the wires, but customers can shop for retail energy suppliers from competing companies.

What Role Do Public Utility Commissions Play in Energy Regulation?

Public utility commissions (PUCs), which are sometimes referred to as public service commissions (PSCs), serve as the daily referees of state energy law. Their jobs include:

• Rate‑setting: Approving or denying utility requests to raise prices based on need and fairness.
• Resource planning: Requiring utilities to file integrated resource plans that compare new gas plants, wind energy, solar energy, or energy efficiency programs on equal footing.
• Investment monitoring: Overseeing utility companies’ investments to ensure they meet the needs of their consumers.
• Consumer protection: Resolving billing disputes and addressing outage complaints.

Through these levers, PUCs turn broad statutes into on‑the‑ground results.

What International Treaties and Agreements Influence National Energy Laws?

Energy is a global commodity, as many nations worldwide are looking to energy reform as a key factor in reducing carbon emissions and slowing global climate change. This often results in global deals that can impact domestic statutes. Some international agreements that can affect domestic energy rules include:

• The Paris Agreement targets push federal and state lawmakers to craft more ambitious carbon-cutting policies.
• Trade pacts, such as the U.S.-Mexico-Canada Agreement, facilitate the cross-border flow of oil, gas, and clean energy.
• The International Energy Agency and G-20 communiqués also inform U.S. energy policy debates by benchmarking progress and sharing best practices.

What Are the Legal Challenges in Transitioning to a Low‑Carbon or Clean Energy Economy?

While many laws are encouraging a shift away from fossil fuels and toward renewable energy, some legal challenges persist. These challenges include:

• Permitting bottlenecks: Thousands of miles of new transmission lines are required for remote wind and solar projects. Current review timelines struggle to keep pace.
• Stranded assets: Coal plants financed to run for 40 years may retire early. This can lead to a host of issues, including financing the remaining debt and determining how to repay it.
• Reliability and markets: High levels of renewables mean the grid requires storage, flexible demand, and backup resources to ensure stability. Market rules must encourage those services without inflating costs.
• Equity and workforce: Laws must help coal-region workers retrain and ensure that low-income customers share in the benefits of efficiency upgrades, not just rate increases.

Solving these tensions will shape the next generation of U.S. energy law.

Global and Domestic Energy Laws Shape Our Energy Present and Future

Energy laws set the stage for the future of electricity for all consumers. From ensuring utility companies are fair in their pricing to folding future emission targets into national and local laws, these laws are far-reaching and necessary.

While these laws reshape our energy future, they often move at a slow pace. Fortunately, you can control the present by choosing your preferred retail energy provider (REP) if you live in a competitive energy market.

Learn more about Just Energy’s Green Energy initiatives. 

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