     United States Court of Appeals
              FOR THE DISTRICT OF COLUMBIA CIRCUIT

                          –————
No. 01–1314                            September Term, 2002

                  Filed On: March 5, 2003


                   IDAHO POWER COMPANY,
                         PETITIONER

                               v.

         FEDERAL ENERGY REGULATORY COMMISSION,
                     RESPONDENT

              ARIZONA PUBLIC SERVICE COMPANY,
                        INTERVENOR

                   –————
  BEFORE: Edwards, Randolph, and Tatel, Circuit Judges

                         ORDER
   Upon consideration of intervenor’s petition for rehearing
filed January 27, 2003, and respondent’s response thereto;
petitioner’s motion for leave to exceed the page limits, and
the lodged opposition, it is
   ORDERED that the motion for leave to exceed the page
limits be granted. The Clerk is directed to file the lodged
document. It is
  FURTHER ORDERED that the petition be granted. It is
   FURTHER ORDERED that the opinion in Idaho Power
Co. v. FERC, 312 F.3d 454 (D.C. Cir. 2002), be amended as
follows:
  Delete the last sentence of the opinion and insert in lieu
thereof:
                           2

  The case is remanded to FERC for consideration of the
appropriate remedy in light of this opinion.

                     Per Curiam
                                     FOR THE COURT:
                                     Mark J. Langer, Clerk
                               BY:
                                     Michael C. McGrail
                                     Deputy Clerk
  Notice: This opinion is subject to formal revision before publication in the
Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify
the Clerk of any formal errors in order that corrections may be made
before the bound volumes go to press.




       United States Court of Appeals
                  FOR THE DISTRICT OF COLUMBIA CIRCUIT




Argued October 15, 2002                   Decided December 13, 2002

                               No. 01-1314

                        IDAHO POWER COMPANY,
                              PETITIONER

                                     v.

            FEDERAL ENERGY REGULATORY COMMISSION,
                        RESPONDENT

                 ARIZONA PUBLIC SERVICE COMPANY,
                           INTERVENOR



             On Petition for Review of Orders of the
             Federal Energy Regulatory Commission



  Charles G. Cole argued the cause for petitioner. With him
on the briefs were Gary A. Morgans and Alice E. Loughran.
  Larry D. Gasteiger, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With him on

 Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
                              2

the brief were Cynthia A. Marlette, General Counsel, and
Dennis Lane, Solicitor.
  John D. McGrane was on the brief for intervenor.
  Before: EDWARDS, RANDOLPH and TATEL, Circuit Judges.
  Opinion for the Court filed by Circuit Judge EDWARDS.
   EDWARDS, Circuit Judge: Petitioner, Idaho Power Compa-
ny, challenges two FERC orders barring Idaho Power from
entering into a 10-year contract to provide electricity to the
IP Merchant Group (‘‘IP Merchant’’) from December 2000
through December 2010. See Idaho Power Co., Order Deny-
ing Petition for Declaratory Order, 94 F.E.R.C. ¶ 61,311
(2001) (‘‘Order Denying Petition’’); Idaho Power Co., Order
Denying Rehearing and Clarifying Prior Order, 95 F.E.R.C.
¶ 61,224 (2001) (‘‘Order Denying Rehearing’’). Before receiv-
ing the ill-fated bid from IP Merchant, Idaho Power had been
furnishing electric transmission service to the Arizona Public
Service Company (‘‘APS’’). APS had a ‘‘right of first refusal’’
to match the IP Merchant bid for service from Idaho Power.
In order to exercise its right of first refusal, APS had to
‘‘agree to accept a contract term at least equal to [the]
competing request’’ offered by IP Merchant in its bid for
transmission service from Idaho Power. Idaho Power Com-
pany Open Access Transmission Tariff § 2.2 (‘‘Idaho Power
OATT’’), Joint Appendix (‘‘J.A.’’) 230. However, because it
could only seek service from Idaho Power in 18-month incre-
ments, APS was unable to match IP Merchant’s 10-year
contract bid. FERC nonetheless ruled that Idaho Power was
obliged to continue providing service to APS, because the
‘‘transmission service requests were not substantially the
same in all respects [due to] the dissimilarity in available
terms of service.’’ Order Denying Rehearing, 95 F.E.R.C. at
61,759. In other words, FERC reasoned that the offers by
APS and IP Merchant were not ‘‘substantially the same in all
respects,’’ and thus not competing bids, because IP Merchant
offered a 10-year term while APS offered only an 18-month
term. Order Denying Petition, 94 F.E.R.C. at 62,145; Order
Denying Rehearing, 95 F.E.R.C. at 61,759.
                                3

   FERC’s interpretation of the right of first refusal provision
defies reason. Idaho Power’s Open Access Transmission
Tariff (‘‘OATT’’) and FERC’s orders creating the applicable
pro forma tariff provide that, in order to exercise a right of
first refusal, ‘‘the existing firm service customer must agree
to accept a contract term at least equal to a competing
request by any new Eligible Customer.’’ Idaho Power OATT
§ 2.2, J.A. 230; Promoting Wholesale Competition Through
Open Access Non-Discriminatory Transmission Services by
Public Utilities; Recovery of Standard Costs by Public Utili-
ties and Transmitting Utilities, Order No. 888-A, F.E.R.C.
Stats. & Regs. ¶ 31,048 (1997) (‘‘Order No. 888-A’’). FERC
has turned the Tariff and orders on their heads by suggesting
that the competitor must put forward an offer identical to the
incumbent’s in order for the competing bids to be ‘‘substan-
tially the same in all respects.’’ Under this reasoning, the
competitor is not allowed to make a better offer, which of
course ensures that the incumbent never loses. This is a
nonsensical construction of the ‘‘right of first refusal,’’ which
we reject as arbitrary and capricious. Accordingly, we grant
Idaho Power’s petition for review.

                        I.   BACKGROUND
A.   The Pro Forma Tariff
  In 1996, FERC promulgated a set of rules designed to
create a more competitive environment in the electric utility
industry. Promoting Wholesale Competition Through Open
Access Non-Discriminatory Transmission Services by Public
Utilities; Recovery of Stranded Costs by Public Utilities and
Transmitting Utilities, Order No. 888, F.E.R.C. Stats. &
Regs. 31,036 (1996) (‘‘Order No. 888’’), order on reh’g, Order
No. 888-A, order on reh’g, Order No. 888-B, 81 F.E.R.C.
61,248 (1997), order on reh’g, Order No. 888-C, 82 F.E.R.C.
61,046 (1998), aff’d in part and remanded in part sub nom.
Transmission Access Policy Study Group v. FERC, 225 F.3d
667 (D.C. Cir. 2000), aff’d jurisdictional ruling sub nom. New
York v. FERC, 535 U.S. 1 (2002). These rules required each
utility to separate its transmission function from its wholesale
                               4

merchant function (i.e., the selling of electric power at whole-
sale rates). They also required each utility to file and take
transmission under an OATT designed to assure access to
transmission service on a non-discriminatory basis. FERC’s
rules specified the terms of a pro forma tariff designed to
achieve the competitive goals of Order No. 888. Order No.
888 at 31,926-64. With limited exceptions, each utility’s
OATT must conform to the non-rate terms and conditions
specified in the pro forma tariff. Report of the Committee on
Electric Utility Regulation, 18 ENERGY L.J. 197, 200 (1997)
(‘‘The FERC will allow deviations from the pro-forma’s terms
and conditions to reflect regional practices, but these devia-
tions are limited primarily to scheduling deadlines. With
very limited exceptions, the FERC has rejected all other
deviationsTTTT’’). FERC revised the pro forma tariff in
Order No. 888-A.
  The pro forma tariff required each utility to create an Open
Access Same Time Information System (‘‘OASIS’’), an elec-
tronic system for accepting transmission requests that would
make them known simultaneously to all potential customers.
While § 13.2 of the pro forma tariff specified that requests
for long-term firm service would generally be accepted in the
order in which they are received, Order No. 888-A at 30,515-
16, it also noted a special provision in § 2.2 for determining
priority where an incumbent customer seeks to renew service.
Id. at 30,516.
  Section 2.2 of the tariff provided the incumbent customer
with a right of first refusal to match the duration offered by a
new customer at the full OATT rate. Section 2.2 provides, in
relevant part:
    If at the end of the contract term, the Transmission
    Provider’s Transmission System cannot accommo-
    date all of the requests for transmission service the
    existing firm service customer must agree to accept
    a contract term at least equal to a competing re-
    quest by any new Eligible Customer and to pay the
                                5

     current just and reasonable rate, as approved by the
     Commission, for such service.
Id. at 30,511. FERC explained in the Preamble to the pro
forma tariff in Order No. 888-A that, ‘‘[b]ecause the purpose
of the right of first refusal provision is to be a tie-breaker, the
competing requests should be substantially the same in all
respects.’’ Id. at 30,198.
B. The Transmission Service Requests
   Idaho Power provides transmission service in accordance
with the rates, terms and conditions of its OATT. Idaho
Power filed its OATT pursuant to FERC Order No. 888, and
FERC accepted it as the filed rate. Atlantic City Elec. Co.,
77 F.E.R.C. ¶ 61,144 (1996) (non-rate terms and conditions);
Allegheny Power Sys., Inc., 80 F.E.R.C. ¶ 61,143 (1997)
(rates). Idaho Power revised its OATT pursuant to Order
No. 888-A, and FERC accepted the revisions. Idaho Power’s
OATT is substantially the same as the pro forma tariff that
FERC issued. Significantly, § 2.2 of Idaho Power’s OATT is
identical to § 2.2 of the pro forma tariff.
   APS is Idaho Power’s incumbent customer, receiving ser-
vice from Borah/Brady Substation in southeastern Idaho,
through Brownlee Substation in western Idaho, to the La-
Grande Substation in northeastern Oregon. The history sur-
rounding the dealings between APS and Idaho Power is
somewhat convoluted. In 1998, APS submitted several re-
quests through Idaho Power’s OASIS for long-term, point-to-
point transmission service for an eight-year period. The
following year, Idaho Power provided APS with a facility
study that demonstrated that existing long-term obligations
prevented Idaho Power from meeting APS’s service request
for the full eight-year period without constructing facility
upgrades. Idaho Power offered APS 100 MW of transmis-
sion service on Borah West that PacifiCorp had contractual
rights to use, but could not due to system limitations. How-
ever, Idaho Power cautioned that this service would terminate
when PacifiCorp upgraded the facilities and exercised its pre-
existing rights to the capacity.
   After further negotiations between Idaho Power and APS
failed to yield an executed service agreement, FERC directed
                               6

Idaho Power to provide APS with partial interim transmis-
sion service. Idaho Power Co., Order Rejecting Unexecuted
Service Agreements, and Requiring the Filing of New Service
Agreements and the Provision of Partial Interim Transmis-
sion Service, 90 F.E.R.C. ¶ 61,009 (2000). Since Idaho Pow-
er’s facility study indicated that it could provide 100 MW of
APS’s requested firm point-to-point service for a term of 18
months rather than the eight years that APS requested,
FERC required Idaho Power to file new service agreements
providing APS with firm transmission service for an 18-month
term. Id. at 61,019. FERC also stated that APS would be
entitled to roll over its service at the end of the 18-month
term, if it chose not to construct additional facilities and the
capacity committed to PacifiCorp remained available. Id.
This FERC order effectively restricted APS’s ability to bid to
18-month increments.
   Subsequently, on November 8, 2000, IP Merchant submit-
ted a request on Idaho Power’s OASIS for 200 MW of long-
term firm point-to-point transmission service for the period
December 1, 2000 through December 31, 2010. The following
day, APS sent a letter to Idaho Power stating that it was
exercising its rollover rights for an additional 18-month peri-
od from April 1, 2001 through September 30, 2002. Then on
November 15, 2000, IP Merchant submitted a second request
on Idaho Power’s OASIS for an additional 200 MW of long-
term firm point-to-point transmission service. This service
was also from the Idaho Power system to LaGrande, for a 10-
year period from January 1, 2001 to December 31, 2010.
   On December 20, 2000, Idaho Power advised APS of its
right of first refusal. Idaho Power simultaneously informed
APS that it was filing a Petition for Declaratory Order. The
Petition requested guidance as to whether, if APS submitted
a 10-year or longer request for which the continuation of
service beyond 18 months would be contingent on the continu-
ing availability of capacity over Borah West, this contingent
request would be sufficient to match the 10-year, non-
contingent IP Merchant request. In response to the Petition,
APS questioned the validity of the IP Merchant transmission
requests in light of the fact that they were not ‘‘precon-
                               7

firmed’’ requests, no service agreements had been executed,
and no facilities study agreements or financial commitments
had been proffered. Arizona Public Service Company’s Mo-
tion to Intervene, Protest and Request for Expedited Consid-
eration at 14-16, 19 n.39, Idaho Power Co., 94 F.E.R.C.
¶ 61,311 (2001), J.A. 78-80, 83 n.39. APS also argued that,
since it is ‘‘willing to match the Idaho Merchant Group’s term
of 10 years, and to extend it for an additional 5 years, for a
term from April 1, 2001 through March 31, 2016, to the extent
necessary for APS to retain service,’’ it should prevail over IP
Merchant under OATT’s tie-breaking mechanism. Id. at 19,
J.A. 83. However, APS did not seek a waiver from FERC’s
order limiting it to 18-month terms so that it could compete
fully against IP Merchant in exercising its right of first
refusal.
C. FERC’s Orders
   Despite the shorter term offered by APS, FERC ruled in
its initial order that APS could roll over its contract. FERC
acknowledged that the priority rule was designed to ‘‘pro-
vide[ ] a mechanism for allocating transmission capacity when
there is insufficient capacity to accommodate all requesters.’’
Order Denying Petition, 94 F.E.R.C. at 62,144. However,
FERC stated that, under Order No. 888-A, the two custom-
ers’ requests had to be ‘‘ ‘substantially the same in all
respects’ ’’ in order to be competing. Id. at 62,145 (quoting
Order No. 888-A at 30,197) (emphasis in original). FERC
found that the two requests were not, in fact, substantially
the same: Instead, it found them to be ‘‘vastly different,’’
primarily because they flowed in different directions and used
different portions of the Idaho Power system. Id. FERC
also noted that ‘‘the dissimilarity in available terms of service
also supports the variant nature of the two customers’ trans-
mission service requests.’’ Id. FERC further noted that
APS expressed an intention to match the IP Merchant
Group’s 10-year offer, but was restricted from doing so by a
prior FERC order. Id. Since FERC found that the re-
quests were not substantially the same in all respects, the
agency ruled that they were not competing. It thus ordered
Idaho Power to give the available 75 MW to APS. Id.
                                8

   Idaho Power petitioned for rehearing. It first noted that a
central factual premise for FERC’s order – that the two
requests flowed in different directions and used different
portions of the Idaho Power system – was incorrect. Rather,
the requests flowed in the same direction over the 80-mile
line in dispute. Further, Idaho Power argued that, because
APS had not matched the IP Merchant Group’s offer, the IP
Merchant Group should be the priority applicant.
   FERC denied Idaho Power’s request for rehearing. It
retreated from its reliance on the alleged physical differences
between the services, stating that, while it had ‘‘discussed the
physical differences between the transmission service re-
quests, our primary rationale for determining that the trans-
mission service requests were not substantially the same in
all respects was the dissimilarity in available terms of ser-
vice.’’ Order Denying Rehearing, 95 F.E.R.C. at 61,759.
Since APS was limited to 18-month increments, FERC rea-
soned that ‘‘to permit IP Merchant’s longer term service
request to obtain transmission capacity at the expense of
Arizona Public Service would inappropriately disadvantage an
existing transmission customer.’’ Id. Thus, FERC awarded
the 75 MW of service to APS, for the 18-month period ending
September 30, 2002. Idaho Power now petitions this court
for review.

                         II.   ANALYSIS
A.   Standing
  The first issue we must address is whether Idaho Power
possesses constitutional standing to challenge FERC’s orders.
FERC argues that Idaho Power suffered no ‘‘injury in fact’’
because the utility cannot prove that FERC’s orders will
cause any monetary loss. We reject this argument.
   The two principal forms of standing are ‘‘Article III (case
or controversy)’’ and ‘‘prudential.’’ Article III standing en-
tails three requirements:
     First, the plaintiff must have suffered an ‘‘injury in
     fact’’—an invasion of a legally protected interest
                                9

    which is (a) concrete and particularized, and (b)
    ‘‘actual or imminent, not ‘conjectural’ or ‘hypotheti-
    cal.’ ’’ Second, there must be a causal connection
    between the injury and the conduct complained of—
    the injury has to be ‘‘fairly TTT trace[able] to the
    challenged action of the defendant, and not TTT th[e]
    result [of] the independent action of some third
    party not before the court.’’ Third, it must be
    ‘‘likely,’’ as opposed to merely ‘‘speculative,’’ that the
    injury will be ‘‘redressed by a favorable decision.’’
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)
(citations omitted); see also El Paso Natural Gas Co. v.
FERC, 50 F.3d 23, 26 (D.C. Cir. 1995) (describing the re-
quirements for demonstrating an injury in fact).
   FERC’s only standing argument is that Idaho Power suf-
fered no injury in fact because the utility cannot prove that
FERC’s orders will cause it to lose any profits. FERC
points out Idaho Power’s statement that FERC’s orders
required it ‘‘to enter into a contract that, for an eighteen-
month period, would generate $1,312,875, and forgo entering
into a ten-year contract that would yield $8,752,500,’’ Br. of
Petitioner at 28, and states that the two amounts, adjusted
for time differential, are equivalent. Thus, at least for the
next 18 months, FERC argues that ‘‘petitioner is in exactly
the same position revenue-wise, regardless of which contract
it is required to accept.’’ Br. of Respondent at 23.
   This argument is meritless. Idaho Power has suffered an
injury in fact because FERC’s orders bind it to an 18-month
contract with APS and preclude it from entering a long-term
10-year contract with IP Merchant.
    As a general matter, in a perfectly competitive mar-
    ket, a long-term contract incorporates a premium for
    stability, and a pipeline naturally values a longer-
    term transportation contract more highly, ceteris
    paribusTTTT If the maximum approved rate artifi-
    cially limits a rival shipper’s ability to outbid the
    existing shipper, the rival shipper may offer a
                              10

      higher-value contract by bidding up the contract
      duration instead.
United Distrib. Cos. v. FERC, 88 F.3d 1105, 1140 (D.C. Cir.
1996). ‘‘[T]he reality [is] that contract duration is a measure
of value.’’ Id. Because Idaho Power possesses a legally-
protected interest in entering a longer-term contract, it suf-
fered a cognizable injury when it was compelled to forgo a 10-
year contract with IP Merchant and instead enter a shorter-
term contract with its associated market risks. That injury
was immediate, concrete, and particularized.
   We have previously recognized that an agency ruling that
replaces a certain outcome with one that contains uncertainty
causes an injury that is felt immediately and confers standing.
In Rio Grande Pipeline Co. v. FERC, 178 F.3d 533 (D.C. Cir.
1999), petitioner Rio Grande Pipeline Company could either
justify the rates for its service through 18 C.F.R. § 342.2(a),
in which it was required to ‘‘file cost, revenue and throughput
data supporting the proposed rate,’’ or through § 342.2(b),
which required only ‘‘a sworn statement that the proposed
rate is agreed to by at least one non-affiliated person who
intends to use the service.’’ Rio Grande Pipeline Co., 178
F.3d at 536. The major advantage to the former provision
was that rates justified under § 342.2(b) were ineffective if a
protest to the initial rate was filed; after the protest, the
carrier would be required to seek a § 342.2(a) justification.
Id. Rio Grande requested FERC approval pursuant to
§ 342.2(a). FERC denied this request. However, the agen-
cy ‘‘noted TTT that since Rio Grande had supplied the affidavit
required by § 342.2(b), and no entity had protested the
charged rate, Rio Grande was free to charge the proposed
rate in its transactions.’’ Id. at 537. When Rio Grande
petitioned this court for review, FERC argued that the
petitioner had suffered no injury in fact, because it remained
free to establish the same rates under § 342.2(b). Id. at 539-
40. However, we found that FERC’s orders caused the
petitioner a ‘‘present economic injury’’ because approval un-
der that section left the rates open to challenge at any time
by third parties, while approval under § 342.2(a) would have
afforded greater certainty. Id. at 540.
   FERC argues that Idaho Power is unlikely to suffer any
economic loss in the future because at least three parties –
                               11

APS, the IP Merchant Group, and PacifiCorp – have ex-
pressed an interest in using that capacity for the extended 10-
year period. However, the energy markets are notoriously
volatile. See Andrew S. Katz, Using the EEI-NEM Master
Contract to Manage Power Marketing Risks, 21 ENERGY L.J.
269, 271 (2000); With Tariff Modifications, Pipelines Move to
Reduce Credit Risk, INSIDE F.E.R.C., Aug. 26, 2002, LEXIS,
News Library, News Group File (explaining that three gas
pipelines’ move to amend their tariffs to include greater
protection from ‘‘noncreditworthy’’ customers ‘‘[h]ighlight[s]
the increasingly volatile nature of energy markets and compa-
nies’’). Even if market volatility did not diminish these
parties’ interest in Idaho Power’s capacity, it could doubtless-
ly diminish the profits that Idaho Power could obtain in the
future. FERC’s arguments to the contrary do not corre-
spond with the reality of the energy markets.
   The bottom line is that it is inconceivable that Idaho Power
could be subjected to a FERC order requiring it to enter into
a specific contract concerning the use of its property but lack
standing to challenge that order. See Green v. McElroy, 360
U.S. 474, 493 n.22 (1959) (noting that there is generally
standing to enforce ‘‘a legally protected right to be free from
arbitrary interference with private contractual relation-
ships’’); see also Lujan, 504 U.S. at 561-62 (noting that ‘‘there
is ordinarily little question that the action or inaction has
caused [the plaintiff] injury’’ when ‘‘the plaintiff is himself an
object of the action (or forgone action) at issue’’).
B.   FERC’s Orders
  In general, this court ‘‘gives substantial deference to
[FERC’s] interpretation of filed tariffs, ‘even where the issue
simply involves the proper construction of language.’ ’’ Koch
Gateway Pipeline Co. v. FERC, 136 F.3d 810, 814 (D.C. Cir.
1998) (quoting Nat’l Fuel Gas Supply Corp. v. FERC, 811
F.2d 1563, 1569 (D.C. Cir. 1987)).
    We first look to see if the language of the tariff is
    unambiguous—that is, if it reflects the clear intent
    of the parties to the agreement. If the tariff lan-
    guage is ambiguous, we defer to the Commission’s
                              12

      construction of the provision at issue so long as that
      construction is reasonable.
Koch Gateway Pipeline Co., 136 F.3d at 814. If the tariff’s
language is unambiguous, this court need not defer to
FERC’s interpretation. After all, ‘‘a court need not accept
‘an agency interpretation that black means white. However,
if the choice lies between dark grey and light grey, the
conclusion of the agency TTT will have great weight.’ ’’ Nat’l
Fuel Gas Supply Corp., 811 F.2d at 1572 (quoting Consol.
Gas Supply Corp. v. FERC, 745 F.2d 281, 291 (4th Cir. 1984))
(ellipses added). It is also well understood that no deference
is due if FERC’s interpretation is inconsistent with prior
agency interpretations. Id. at 1571 (‘‘If the agency’s inter-
pretation of a contract has vacillated, deference might give
the agency license to act arbitrarily by making inconsistent
decisions without justification.’’).
   In this case, we reject FERC’s interpretation of the ‘‘right
of first refusal,’’ because it is inconsistent with prior agency
interpretations and, also, because it is nonsensical. It would
be a great challenge indeed to devise a more backward
interpretation of the tariff than that which FERC urges on
the court. FERC essentially contends that § 2.2 of the pro
forma tariff and Idaho Power’s OATT precludes a competitor
from coming forward with a better offer than the incumbent’s
present deal. This interpretation runs contrary to the text of
Idaho Power’s OATT, FERC Orders No. 888 and 888-A, and
the agency’s own prior interpretations.
  1.   Idaho Power’s OATT
   FERC’s interpretation is directly at odds with the language
and logic of § 2.2 of Idaho Power’s OATT. The OATT
provides that if ‘‘the Transmission Provider’s Transmission
System cannot accommodate all of the requests for transmis-
sion service the existing firm service customer must agree to
accept a contract term at least equal to a competing request
by any new Eligible Customer.’’ Idaho Power OATT § 2.2,
J.A. 230. The OATT does not provide that the competing
request must be ‘‘substantially the same in all respects’’ as
the incumbent’s proposed rollover. In fact, the definition
                              13

contained in the tariff is consistent with the ordinary meaning
of ‘‘competing.’’ The generally accepted definition of ‘‘com-
pete’’ is ‘‘to seek to strive for something (as a position,
possession, reward) for which others are also contending.’’
WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 463 (1993).
Likewise, the language of the tariff suggests that two offers
are competing if there is an inability to accommodate both.
   FERC’s interpretation of the tariff would nullify the lan-
guage in § 2.2 which provides that, when two requests are
competing, the incumbent customer must change the term of
its request to at least equal the new eligible customer’s
request. The agency’s interpretation holds that ‘‘the dissimil-
iarity in available terms of service’’ means that the incumbent
has no obligation to match the longer-term competitive bid.
Order Denying Rehearing, 95 F.E.R.C. at 61,759. Under
this interpretation, the incumbent would never have to change
its term of service to match the competitor’s superior offer;
rather, the utility could not consider the competitor’s offer
precisely because it is better. This interpretation is not only
nonsensical; it also relieves the incumbent of any obligation
to ‘‘agree to accept a contract term at least equal to a
competing request.’’ A tariff should not be interpreted in a
manner that renders one of its terms meaningless. Great
Lakes Gas Transmission Ltd. P’ship, 93 F.E.R.C. ¶ 61,008 at
61,019 & n.8 (2000). The fact that FERC’s orders directly
conflict with the plain meaning of the tariff alone merits a
reversal.
  2.   FERC Orders No. 888 and 888-A
  FERC’s orders also conflict with and misinterpret Orders
No. 888 and 888-A. The Preamble to Order No. 888 provides
that the incumbent must match the challenger’s longer pro-
posed term – not that the challenger must come forward with
an offer identical to the incumbent’s. It states that for an
existing customer to renew its service, ‘‘the existing customer
must agree to match the rate offered by another potential
customer TTT and to accept a contract term at least as long as
that offered by the potential customer.’’ Order No. 888 at
31,665. Moreover, the Preamble does not suggest that two
                               14

offers are competing when they are identical. Instead, it
supports the classical definition of competition by stating that
the incumbent’s obligation to match the term and price of the
new customer’s service request arises when ‘‘not enough
capacity is available to meet all requests for service.’’ Id.
There is no suggestion that the two requests must be sub-
stantially the same in all respects for this obligation to apply.
   Order No. 888-A also contradicts FERC’s interpretation.
A number of transmission customers had sought changes to
the tariff, because, they claimed, ‘‘the Commission’s right of
first refusal provision fails to adequately protect existing
transmission customers’ rights to continued service.’’ Order
No. 888-A at 30,195. FERC rejected these complaints and
retained the matching requirements of § 2.2:
      We reject arguments to modify the requirement in
      section 2.2 that existing long-term firm transmission
      customers seeking to exercise their right of first
      refusal must agree to a contract term at least as
      long as that sought by a potential customer. The
      objective of a right of first refusal is to allow an
      existing firm transmission customer to continue to
      receive transmission service under terms that are
      just, reasonable, not unduly discriminatory, or pref-
      erential. Absent the requirement that the customer
      match the contract term of a competing request,
      utilities   could    be    forced   to   enter    into
      shorter-term arrangements that could be detrimen-
      tal from both an operational standpoint (system
      planning) and a financial standpoint.
Id. at 30,197-98. Order No. 888-A thus states clearly and
unambiguously that the incumbent must match the new po-
tential customer’s superior offer.
   FERC’s notion that the challenger’s offer must be substan-
tially the same in all respects to the incumbent’s rollover
provision is, in fact, based on a gross misinterpretation of one
sentence in Order No. 888-A. Examining the full context of
Order No. 888-A’s statement that the two offers must be
‘‘substantially the same in all respects’’ makes FERC’s error
apparent. The quoted language appears in a paragraph in
                              15

which FERC rejected the arguments of incumbent customers
that it could be difficult for them to match the challenger’s
superior offer. The National Rural Electric Cooperative
Association had argued that the incumbent’s obligation to
match the price offered by another customer should be
capped at the maximum transmission rate that the incumbent
customer is obligated to pay prior to the end of its contract
term. Id. at 30,196. FERC responded:
     The fact that existing customers historically have
     been served under a particular rate design does not
     serve to ‘‘grandfather’’ that rate methodology in
     perpetuity. Because the purpose of the right of first
     refusal provision is to be a tie-breaker, the compet-
     ing requests should be substantially the same in all
     respects.
Id. at 30,198. It is clear from this passage that FERC was
imposing a requirement for the existing customer to come
forward with an offer substantially the same in all respects to
the challenger’s, rather than requiring that the challenger
come forward with an offer substantially the same in all
respects to the incumbent’s contract terms. The challenged
orders thus directly conflict with Orders No. 888 and 888-A,
and grossly misinterpret the language in Order No. 888-A.
   3. Prior FERC Interpretations
   The petitioner also points out that FERC’s reasoning in
this case is flatly inconsistent with the agency’s decisions
interpreting § 2.2 of the pro forma tariff. FERC has ruled
repeatedly that § 2.2 requires the incumbent to match the
term of service offered by the new customer.
   For example, in Dynegy Power Marketing, Inc. v. Ameren
Services Co., 93 F.E.R.C. ¶ 61,201 (2000), the agency directed
the transmission provider to grant the incumbent’s request to
roll over its service, provided that there were no competing
requests for the service. In discussing potential offers from
challengers, FERC stated that ‘‘[i]f there is a competing
request with a term exceeding [the incumbent’s] request, [the
incumbent] has the right of first refusal to match the compet-
ing request or to forfeit its own request.’’ Id. at 61,665 n.12.
                               16

   FERC has consistently adopted this interpretation of § 2.2
of the pro forma tariff. See, e.g., Promoting Wholesale
Competition Through Open Access Non-Discriminatory
Transmission Services by Public Utilities, 101 F.E.R.C.
¶ 61,104, 2002 F.E.R.C. LEXIS 2234, at *15 (‘‘The Commis-
sion requires existing customers to match the term of compet-
ing requests for service so that utilities will not be forced to
enter into shorter-term agreements.’’); Wisconsin Pub. Pow-
er Inc. SYS. v. Wisconsin Pub. Serv. Corp., 84 F.E.R.C.
¶ 61,120, at 61,656 (1998) (holding that the incumbent must
match the challenger’s competing term). FERC does not cite
a single case to the contrary. Thus, we must conclude that in
addition to doing violence to the language of the tariff and the
agency’s prior orders, the challenged orders are inconsistent
with prior and subsequent agency interpretations of § 2.2 of
the pro forma tariff.
  4.   APS’s System Constraints
   Finally, FERC suggests that APS should not be required
to match IP Merchant’s longer term offer, because APS was
limited to 18-month terms caused by system constraints. See
Order Denying Petition, 94 F.E.R.C. at 62,145 (‘‘To say that
OATT Section 2.2 controls would create a situation where an
offer to match a longer service term is unattainable.’’). How-
ever, neither Idaho Power’s OATT nor the FERC orders
creating the pro forma tariff excuse the incumbent from
matching a competitor’s offer on these grounds. Nowhere
does the tariff state that an incumbent who cannot match a
competing bid due to system constraints or contractual re-
straints nevertheless has the right to roll over its contract for
a shorter term than the challenger offers. FERC has not
pointed to any phrase in the language of the tariff that would
authorize such an exception.
   Furthermore, the history of the pro forma tariff makes it
clear that FERC intended no such exceptions. When some
parties sought rehearing of Order No. 888 on the grounds
that its rule for incumbents was too strict, FERC rejected
their efforts to secure exceptions. Order No. 888-A at 30,196-
97. The agency stated, ‘‘We reject arguments to modify the
                               17

requirement in section 2.2 that existing long-term firm trans-
mission customers seeking to exercise their right of first
refusal must agree to a contract term at least as long as that
sought by a potential customer.’’ Id. at 30,197. Moreover,
the agency ‘‘reject[ed] the proposition that either existing
wholesale customers or transmission providers providing ser-
vice to retail native load customers should be insulated from
the possibility of having to pay an increased rate for trans-
mission in the future.’’ Id. at 30,198. FERC insisted on this
rule even when some utilities claimed that adherence to it
would place them at a competitive disadvantage. Id. at
30,196.
   Thus, it does not matter that APS was limited to 18-month
increments due to system constraints at Borah West and
preexisting rights possessed by PacifiCorp. These are eco-
nomic factors that may always affect an incumbent’s ability to
exercise a right of first refusal. However, these contingen-
cies of the marketplace do not alter the substantive parame-
ters of the right of first refusal.

                       III.   CONCLUSION
  Accordingly, for the reasons enumerated above, Idaho Pow-
er’s petition for review is hereby granted. FERC’s orders
are reversed and vacated. The case is remanded to FERC for
consideration of the appropriate remedy in light of this opinion.
