In the years prior to the passage of the Act, concern arose about the monopolistic tendencies of the transmission companies and the fact that they were charging higher than competitive prices.

The passage of the Act gave the Federal Power Commission (FPC) control over the regulation of interstate natural gas sales.

Intrastate pipelines between cities began to develop and local governments no longer had the authority to regulate rates.

However, the U.S. Supreme Court ruled that state oversight of these pipelines violated the interstate commerce clause of the U.S. Constitution.

This left a large gap for monopolistic business practices to occur in natural gas transmission.

In 1935, the Federal Trade Commission (FTC) issued a report which voiced its concern with the market power of natural gas utilities.

The act required that companies obtain a "certificate of public convenience and necessity" from the Federal Power Commission before they could make an interstate sale of natural gas.

The Kerr Bill was introduced in 1949 to amend the Act to specifically exclude the regulation of wellhead gas prices.

The act was passed to control the monopolistic tendencies of the market in which companies previously had the power to charge higher than competitive prices.

In 1977, the FPC dissolved and the authority to regulate natural gas was transferred to the Federal Energy Regulatory Commission (FERC).

This mixture of leadership often resulted in conflicting mandates and made it difficult to design a consistent energy policy.

In 1954, the Supreme Court decision in Phillips v. Wisconsin extended FPC jurisdiction over all wellhead sales of natural gas in interstate commerce.

In 1978, FERC was given additional responsibilities for harmonizing the regulation of wellhead gas sales in both the intrastate and interstate markets.