 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued April 19, 2016                  Decided July 15, 2016

                        No. 15-1205

                   BP ENERGY COMPANY,
                        PETITIONER

                             v.

       FEDERAL ENERGY REGULATORY COMMISSION,
                    RESPONDENT

          DOMINION COVE POINT LNG, LP, ET AL.,
                     INTERVENORS


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


    Erika Maley argued the cause for petitioner BP Energy
Company. With her on the briefs were Virginia A. Seitz, John
T. Hebden, and Betsy R. Carr. William A. Williams III entered
an appearance.

     Karin L. Larson, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With her on the
brief were Robert H. Solomon, Solicitor, and Susanna Y. Chu,
Attorney.

   Catherine E. Stetson argued the cause for intervenors
Dominion Cove Point LNG, LP and Statoil Natural Gas, LLC.
                               2

With her on the brief were J. Patrick Nevins, Sean Marotta, and
Kirstin E. Gibbs. Christopher M. Heywood entered an
appearance.

    Before: ROGERS, GRIFFITH and KAVANAUGH, Circuit
Judges.

    Opinion for the Court by Circuit Judge ROGERS.

     ROGERS, Circuit Judge: Petitioner BP Energy Company
receives pipeline and terminal services as an import customer of
the Cove Point liquefied natural gas (“LNG”) facility under a
contract with the facility’s owner, Dominion Cove Point LNG,
LP, that expires in 2023. In 2014, Dominion obtained
authorization from the Federal Energy Regulatory Commission
to convert the Cove Point facility from an import maritime
terminal to a mixed-use, import and export terminal. Dominion
Cove Point LNG, LP, 148 F.E.R.C. ¶ 61,244 (2014) (“2014
Authorization Order”), on reh’g, 151 F.E.R.C. ¶ 61,095 (2015)
(“Rehearing Order”). BP Energy petitions for review of the
Commission’s determination that Dominion did not act in an
unduly discriminatory manner under section 3(e)(4) of the
Natural Gas Act (“NGA”), 15 U.S.C. § 717b(e)(4), when it
agreed to shorten the contract term of a non-open access
customer’s terminal services contract, Statoil Natural Gas, LLC,
without offering a corresponding “turn back” option to open
access customers such as BP Energy. The Commission ruled
that turn back opportunities are outside the scope of NGA
§ 3(e)(4)’s undue discrimination provision and that BP Energy
and Statoil are not similarly situated because BP Energy
receives terminal services under NGA § 7 while Statoil receives
terminal services under NGA § 3. See 2014 Authorization
Order, ¶¶ 45-48; Rehearing Order ¶¶ 6-17. For the following
reasons, we remand the case to the Commission for further
explanation.
                                 3

                                 I.

     Prior to 2002, the providers of both LNG terminal services
and interstate natural gas pipeline services were regulated under
NGA § 7, 15 U.S.C. § 717f, and were traditionally required to
do so at cost-of-service rates and under open access terms of
service. In 2002, upon determining that the traditional approach
may have had the unintended effect of deterring new investment,
the Commission announced a “less intrusive”regulatory regime
for LNG terminals under NGA § 3. Hackberry LNG Terminal,
LLC, 101 F.E.R.C. ¶ 61,294 at P 22 (2002). This approach was
effectively codified by the Energy Policy Act of 2005. As
amended, NGA § 3 provides that the Commission, before
January 1, 2015, “shall not . . . condition an order on . . . a
requirement that the LNG terminal offer service to customers
other than the applicant”; “any regulation of the rates, charges,
terms, or conditions of service of the LNG terminal”; or “a
requirement to file with the Commission schedules or contracts
related to the rates, charges, terms, or conditions of service of
the LNG terminal.” 15 U.S.C. § 717b(e)(3)(B)(ii). As a result,
LNG terminals are no longer required to offer open access
terminal services at cost-based rates and instead may contract
with customers for terminal services based on market-based
rates. It also provides protections for existing customers
receiving service under NGA § 7 against cost-shifting,
degradation of service, and undue discrimination. See NGA
§ 3(e)(4), 15 U.S.C. § 717b(e)(4). Under NGA § 7, in turn, the
Commission remains responsible for ensuring that the rates at
which facilities provide terminal services to open access
customers and other services, such as pipeline services, are just
and reasonable, do not reflect “any undue preference or
advantage,” and are publicly disclosed in the facility’s tariff. Id.
§ 717c. Service providers must include certain terms and
conditions in their tariffs, including mechanisms that allow
certain customers to release their contracted-for interstate
                                4

pipeline services and transfer them to other parties, see 18
C.F.R. § 284.8, or extend existing arrangements past the end of
their current contract, see id. § 284.221(d)(2)(ii).

     At issue here is the turn back of service opportunity that
Dominion offered Statoil in 2012 in connection with its Cove
Point conversion project. By way of background, the Cove
Point facility was originally constructed as an LNG import
terminal consisting of a maritime terminal in Maryland and a
dedicated pipeline from the terminal to interstate connections in
Virginia. See EarthReports v. FERC, No. 15-1127 (D.C. Cir.
2016). In 2001, after a period of dormancy, the Commission
authorized Cove Point to resume LNG imports. See Cove Point
LNG Ltd. Partnership, 97 F.E.R.C. ¶ 61,043, 61,192 (2001). BP
Energy was one of three customers that contracted for both LNG
terminal services and related pipeline services under traditional
NGA § 7 cost-of-service rates. See id. at 61,193. In 2006, the
Commission authorized the expansion of Cove Point’s terminal
and pipeline service capacity with Statoil as the sole expansion
customer. See Dominion Cove Point LNG, LP, 115 F.E.R.C.
¶ 61,337 at PP 9-15 (2006) (“2006 Authorization Order”). The
Commission allowed Dominion to provide terminal services to
Statoil at market rates under NGA § 3 while providing cost-of-
service rates to its existing customers under NGA § 7. See id.,
¶¶ 106-11. Statoil also contracted for pipeline services at NGA
§ 7 cost-of-service rates. See id., ¶ 23. Pursuant to a settlement
agreement with Cove Point’s existing customers, Dominion
amended section 30 of the general terms and conditions of Cove
Point’s tariff regarding how NGA § 3 and NGA § 7 customers
would receive terminal services, which the Commission found
adequate to ensure that “there will be no undue discrimination
against the existing [NGA § 7] customers as to their terms and
conditions of service in the critical tariff areas, such as
nominations, scheduling and operating conditions.” Id., ¶ 150.
                                5

    In 2012, Dominion held a “reverse open season” that
extended the opportunity to turn back contracted-for pipeline
services to its NGA § 7 pipeline customers in order to free up
pipeline capacity in support of the proposed conversion project.
After receiving no requests, Dominion negotiated an agreement
with Statoil to turn back the entirety of its NGA § 7 pipeline and
NGA § 3 terminal services.

     BP Energy filed a protest to the turn back agreement on the
ground it was unduly discriminatory because it allowed Statoil
to turn back both pipeline and terminal services, an opportunity
not extended to other customers during the reverse open season.
Relinquishing only its contracted-for pipeline services, BP
Energy argued, would have left it paying for terminal services
that were worthless without the ability to transport natural gas
to or from the terminal through the pipeline. The Commission
concluded that the turn back agreement was not unduly
discriminatory under NGA § 3(e)(4) because it did not change
the terms and conditions of terminal services for BP Energy and
because BP Energy and Statoil were not similarly situated. See
2014 Authorization Order, ¶¶ 46-47. BP Energy sought
rehearing, reiterating its earlier arguments and claiming that it
was similarly situated to Statoil because both faced comparable
market risks notwithstanding the different regulatory regimes
under which they received Cove Point terminal services. The
Commission granted rehearing and affirmed its conclusion that
the turn back agreement was outside the scope of NGA
§ 3(e)(4)’s undue discrimination provision and added that BP
Energy and Statoil were not similarly situated because of
statutory and regulatory protections applicable to BP Energy but
not Statoil. See Rehearing Order, ¶¶ 10–15. BP Energy
petitions for review of the Commission’s orders declining to
order Dominion to offer it a full turn back opportunity.
                                 6

                                II.

     As a threshold matter, the Commission maintains that BP
Energy lacks standing under Article III of the Constitution,
which is required for the court to consider its petition for review.
In the Commission’s view, the injury BP Energy claims to have
suffered — the more than $25 million a year that BP Energy
asserts it will have to pay for the services that it should be
allowed to turn back, see Pet’r’s Br. 24 — is simply the result
of BP Energy’s contract with Dominion, not the Commission’s
orders. Further, the Commission suggests that BP Energy does
not attempt to show it will suffer any competitive harm or other
adverse impact as a result of Statoil’s early contract termination.
BP Energy responds that the Commission’s failure to enforce its
statutory right not to be unduly discriminated against is the
cause of its economic harm due to its inability to turn back its
contracted-for terminal services and that competitive harm need
not be shown. We agree that BP Energy has standing.

     To establish Article III standing, BP Energy must
“demonstrate that [it] has suffered injury in fact, that the injury
is fairly traceable to the actions of [the Commission], and that
the injury will likely be redressed by a favorable decision.’” Ne.
Energy Associates v. FERC, 158 F.3d 150, 153 (D.C. Cir. 1998)
(quoting Bennett v. Spear, 520 U.S. 154, 162 (1997) (internal
citations and quotations omitted)); see Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-61 (1992). The court “assum[es]
during the standing inquiry that [BP Energy] will eventually win
the relief [it] seeks[,]” Fla. Audubon Soc’y v. Bentsen, 94 F.3d
658, 664 n.1 (D.C. Cir. 1996), and thus accepts BP Energy’s
interpretation of NGA § 3(e)(4) as correct, see Parker v. District
of Columbia, 478 F.3d 370, 376-77 (D.C. Cir. 2007).

    BP Energy’s standing is “self-evident.” Sierra Club v. EPA,
292 F.3d 895, 899-900 (D.C. Cir. 2002). The challenged orders
                                7

injured BP Energy by depriving it of an opportunity to turn back
underutilized services it values at $25 million annually. See Ne.
Energy Associates, 158 F.3d at 153-54; Scheduled Airlines
Traffic Offices, Inc. v. Dep’t of Def., 87 F.3d 1356, 1358-59
(D.C. Cir. 1996). By not ordering Dominion to offer it a turn
back opportunity similar to that extended to Statoil, the
Commission failed to enforce its statutory right to non-
discriminatory treatment under a colorable interpretation of
NGA § 3(e)(4), causing BP Energy’s injury. See Zivotofsky ex
rel. Ari Z. v. Sec’y of State, 444 F.3d 614, 619 (D.C. Cir. 2006).
Moreover, even assuming a showing of competitive injury is
necessary, the Commission does not dispute that the 2012 turn
back agreement granted a valuable right to Statoil, which BP
Energy views as a competitor, such that failing to offer BP
Energy a corresponding right causes it competitive harm. See
United Transp. Union v. ICC, 891 F.2d 908, 912 n.7 (D.C. Cir.
1989). Granting the petition on the Commission’s determination
that the turn back agreement was not unduly discriminatory
would provide BP Energy with a remedy because the
Commission could change its position on remand. This is
sufficient to establish standing. See Ne. Energy Associates, 158
F.3d at 153-54. The fact that BP Energy has not provided
evidence of its valuation of that opportunity is irrelevant; the
Commission does not deny that the turn back opportunity has
value and the deprivation of the turn back opportunity for those
services constitutes an injury-in-fact regardless of that
opportunity’s precise monetary value.

                               III.

    In the challenged orders, the Commission identified two
grounds for rejecting BP Energy’s undue discrimination claim.
Both hinge on its interpretation of NGA § 3(e)(4), which
provides:
                               8

         An order issued for an LNG terminal that also offers
         service to customers on an open access basis shall not
         result in subsidization of expansion capacity by
         existing customers, degradation of service to existing
         customers, or undue discrimination against existing
         customers as to their terms or conditions of service at
         the facility, as all of those terms are defined by the
         Commission.

15 U.S.C. § 717b(e)(4). First, the Commission interpreted
“terms or conditions of service at the facility” as limited to
“operational requirements,” 2014 Authorization Order, ¶ 46,
including “critical tariff areas, such as nominations, scheduling
and operating conditions,” Rehearing Order, ¶ 14, which does
not include contract termination. Second, as an alternative
ground, the Commission interpreted “undue discrimination” to
apply only to similarly situated customers and found that BP
Energy and Statoil are not similarly situated because they
receive terminal service subject to different regulatory schemes
that provide different protections. See 2014 Authorization
Order, ¶ 47 & n.54; Rehearing Order, ¶ 13. It maintains that,
because NGA § 3(e)(4) leaves such terms undefined and
expressly delegates interpretive authority, its interpretation of
NGA § 3(e)(4) is reasonable and subject to a deferential
standard of review. See Chevron U.S.A., Inc v. NRDC, Inc., 467
U.S. 837, 842-44 (1984); see also City of Arlington v. FCC, 133
S. Ct 1863, 1868 (2013).

     BP Energy contends that the Commission’s interpretation
of undue discrimination is contrary to the clear text of NGA
§ 3(e)(4) and unreasonable in light of the provision’s purpose.
In its view, the Commission’s conclusion that BP Energy and
Statoil are not similarly situated for purposes of being treated
equivalently renders the provision “all but meaningless,” Pet’r’s
Br. 22. Further, it maintains that the Commission failed to
                                 9

consider significant factors, in particular whether Statoil has
protections under its contract with Dominion that are equivalent
to the regulatory protections for open access customers like it.
Insofar as the Commission concluded that BP Energy and Statoil
receive “fundamentally the same service” from Dominion,
Pet’r’s Br. 29 (internal quotation omitted), BP Energy contends
that the Commission provided no reasoned basis for concluding
that BP Energy and Statoil are not similarly situated with regard
to the critical right to turn back terminal service when they are
similarly situated with regard to other critical tariff areas.

     Doubtless this court’s review of whether the Commission’s
determination not to order Dominion to offer BP Energy a full
turn back opportunity was “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law” and thus
must be “h[e]ld unlawful and set aside,” 5 U.S.C. § 706(2), is
deferential. Nonetheless the Commission’s actions must be
“rational, based on consideration of the relevant factors and
within the scope of the authority delegated to the agency by the
statute.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm
Mut. Auto. Ins. Co., 463 U.S. 29, 42 (1983). Necessarily, this
requires an agency to “articulate a satisfactory explanation for
its action[s][,]” id. at 43, including its statutory interpretation,
see Northpoint Tech., Ltd. v. FCC, 412 F.3d 145, 151 (D.C. Cir.
2005). Where an explanation is lacking or inadequate, the court
must remand for an adequate explanation of the agency’s
decision and policy. See Maher Terminals LLC v. Fed. Mar.
Comm’n, 816 F.3d 888, 892 (D.C. Cir. 2016).

     In authorizing the Cove Point conversion project, the
Commission concluded there was no undue discrimination in
part because “Dominion has not proposed to change the terms
and conditions of service for BP [Energy]” and “[t]he
operational requirements contained in section 30 of Dominion’s
tariff will continue to ensure no discriminatory treatment of
                               10

service.” 2014 Authorization Order, ¶ 46. Section 30 of the
general terms and conditions of Dominion’s tariff address how
NGA § 3 and NGA § 7 customers were to receive open access
terminal services by generally providing for equal treatment
between NGA § 3 and NGA § 7 customers in matters relating to
timing, nominations, and storage, but does not address turn back
opportunities. See 2006 Authorization Order, ¶¶ 15-19, 148-51.
On rehearing, the Commission similarly concluded that “there
is no reason to revise Dominion’s tariff to address alleged
discrimination” because “the terminal service that [BP Energy]
receives from Dominion is fundamentally the same as that
provided to Statoil[,]” which “receives no preference in
nominating, scheduling, or the quality of the terminal service
provided.” Rehearing Order, ¶ 14.

     To the extent BP Energy suggests that the court cannot
affirm the Commission on the basis of its “operational”
interpretation of NGA § 3(e)(4) because it is a post-hoc
rationalization on which the Commission did not rely in the
challenged orders, it is unavailing. Interpreting NGA § 3(e)(4)’s
undue discrimination requirement to apply only to “critical tariff
areas, such as nominations, scheduling and operating
conditions” as covered by section 30, see 2006 Authorization
Order, ¶ 150, is necessary to these conclusions and “may
reasonably be discerned” from the challenged orders, Casino
Airlines, Inc. v. NTSB, 439 F.3d 715, 717 (D.C. Cir. 2006)
(quoting Bowman Transp., Inc. v. Ark.-Best Freight Sys., Inc.,
419 U.S. 281, 285-86 (1974)). The Commission, therefore, is
not barred from relying on this interpretation.

     BP Energy’s contention that the Commission’s
interpretation of “terms or conditions of service at the facility”
is an unreasonable reading of the clear text of NGA § 3(e)(4) is
not so readily dismissed. The Commission’s interpretation of
the scope of NGA § 3(e)(4)’s protection against undue
                                11

discrimination may prove to be permissible, see Chevron, 467
U.S. at 843, but the Commission has not adequately explained
why this is so in the turn back context at issue. The explanation
“need not be a model of clarity,” Casino Airlines, 439 F.3d at
717, but the challenged orders do not provide an indication of
the reasoning behind this interpretation. The 2014 Authorization
Order quotes NGA § 3(e)(4) but makes no “reasonable attempt
to grapple” with or even refer back to the statutory text. Council
for Urological Interests v. Burwell, 790 F.3d 212, 223 (D.C. Cir.
2015). Nor does the Commission identify factors underlying its
interpretation that are “rationally related to [NGA § 3(e)(4)’s]
purpose[,]” Petit v. U.S. Dep’t of Educ., 675 F.3d 769, 787 (D.C.
Cir. 2012), or “other considerations [that] it believe[s] counsel[]
in favor of its interpretation[,]” Village of Barrington v. Surface
Transp. Bd., 636 F.3d 650, 666 (D.C. Cir. 2011). Instead, the
challenged orders assume this to be the true meaning of NGA
§ 3(e)(4), and do not even acknowledge that the Commission is
engaging in interpretation.

      The sole citation offered by the Commission in support of
its interpretation does not fill the gap. See ACS of Anchorage,
Inc. v. FCC, 290 F.3d 403, 408-09 (D.C. Cir. 2002). On
rehearing, the Commission cited the 2006 Authorization Order
as having concluded that “section 30 was adequate to prevent
undue discrimination[,]” and quoted it as saying: “‘[W]e are
satisfied that there will be no undue discrimination against the
existing . . . customers as to their terms and conditions of service
in the critical tariff areas, such as nominations, scheduling and
operating conditions.’” Rehearing Order, ¶ 14 (quoting 2006
Authorization Order, ¶ 150). The 2006 Authorization Order,
however, provides no explanation of why NGA § 3(e)(4)’s bar
on undue discrimination in the “terms or conditions of service
at the facility[,]” 15 U.S.C. § 717b(e)(4), should be interpreted
in a manner that it is satisfied by the Commission’s finding that
there is no discrimination in the “terms and conditions of service
                                12

in the critical tariff areas[,]” Rehearing Order, ¶ 14. Further, the
Commission approved section 30 in part because the parties
involved in the 2006 Cove Point expansion project had agreed
to its terms as part of a settlement agreement, a context in which
the Commission and the court have expressed their willingness
to accept certain discrepancies that might otherwise be unduly
discriminatory. See Cities of Bethany v. FERC, 727 F.2d 1131,
1139-40 (D.C. Cir.), cert denied, 469 U.S. 917 (1984). And
while the 2006 decision discusses a reverse open season that
resulted in the turn back of certain services by NGA § 7
customers, see 2006 Authorization Order, ¶¶ 30-31, it does not
address the situation where a turn back opportunity is extended
to a NGA § 3 customer but not NGA § 7 customers. Even read
as the Commission suggests, it is unclear why the 2006
Authorization Order would be relevant here.

     To the extent the Commission attempts to counter BP
Energy’s contention on the ground that it has failed to explain
how contract termination is a “term[] or condition[] of service
at the facility[,]” see Resp’t’s Br. 73 (quoting 15 U.S.C.
§ 717b(e)(4)), it misunderstands its burden. See State Farm, 463
U.S. at 43. The Commission has at times appeared to categorize
turn back and similar opportunities as terms and conditions of
service for the purpose of other NGA provisions. See, e.g., E.
Tenn. Nat. Gas, LLC, 117 F.E.R.C. ¶ 61,016 at PP 9-12 (2006);
Tenn. Gas Pipeline Co., 97 F.E.R.C. ¶ 61,225, 62,029-30
(2001); Nat. Gas Pipeline Co. of Am., 76 F.E.R.C. ¶ 61,142,
61,788 (1996). And in relation to Cove Point, the Commission
has suggested in other contexts that such opportunities cannot be
offered in an unduly discriminatory manner. See Dominion
Cove Point LNG, LP, 134 F.E.R.C. ¶ 61,219 at PP 15-16 (2011);
Dominion Cove Point LNG, LP, 119 F.E.R.C. ¶ 61,209 at P 3
(2007). That the Commission, not BP Energy, bears the burden
of explaining its interpretation of NGA § 3(e)(4) is underscored
in view of its precedent.
                               13

     Regardless of the additional explanations offered in
appellate briefs by the Commission and intervenors Dominion
and Statoil why the Commission’s interpretation of NGA
§ 3(e)(4) is reasonable, the court “must judge the propriety of
[the Commission’s] action solely by the grounds invoked by the
agency” and cannot “affirm the administrative action by
substituting what it considers to be a more adequate or proper
basis” without “propel[ling itself] into the domain which
Congress has set aside exclusively for the administrative
agency.” SEC v. Chenery Corp., 332 U.S. 194, 196 (1947); see
also Council for Urological Interests, 790 F.3d at 222. Because
the Commission failed to provide an adequate explanation of its
interpretation of NGA § 3(e)(4)’s scope in the challenged orders,
the court cannot deny the petition on this ground.

     The Commission maintains, however, that its refusal to
order Dominion to offer BP Energy a full turn back opportunity
should be affirmed on the alternate ground that BP Energy and
Statoil are not similarly situated because BP Energy receives
greater regulatory protections as an NGA § 7 customer than does
Statoil as an NGA § 3 customer. In the 2014 Authorization
Order, the Commission stated that it interprets “undue
discrimination” in NGA § 3(e)(4) to mean that “not all
discrimination is undue, and only similarly situated customers
need to be treated similarly.” 2014 Authorization Order, ¶ 47.
As support, it cited precedent affirming its interpretation of
undue discrimination clauses in other statutes that it enforces,
implying that it interprets NGA § 3(e)(4) similarly. See id. n.54
(citing Associated Gas Distrib. v. FERC, 824 F.2d 981, 1009
(D.C. Cir. 1987), cert. denied sub nom. Interstate Nat. Gas Ass’n
v. FERC, 485 U.S. 1006 (1988); Cities of Bethany, 727 F.2d at
1139). Under precedent relating to such provisions, petitioners
making an undue discrimination claim “must demonstrate not
only differential [treatment] between two classes of customers
but also that the two classes of customers are similarly situated
                               14

for purposes of the [treatment].” Wash. Water Power Co. v.
FERC, 201 F.3d 497, 504 (D.C. Cir. 2000) (internal quotation
omitted). No undue discrimination exists where there is “a
rational basis for treating [two entities] differently” and such
differential treatment is “‘based on relevant, significant facts
which are explained.’” Complex Consol. Edison Co. of N.Y., Inc.
v. FERC, 165 F.3d 992, 1012-13 (D.C. Cir. 1999) (quoting
TransCanada Pipelines Ltd. v. FERC, 878 F.2d 401, 413 (D.C.
Cir. 1989)). Nor is disparate treatment in such circumstances
arbitrary and capricious. See TransCanada, 878 F.2d at 413.

     Applying this standard, the Commission noted in the 2014
Authorization Order that BP Energy “receiv[es] open access
terminal services provided under [NGA § 7], while Statoil is an
expansion customer receiving non-open access service under
[NGA § 3].” 2014 Authorization Order, ¶ 47. Because these
regulatory regimes are “distinguishable[,]” the Commission
concluded that “BP [Energy] and Statoil are not similarly
situated” for the purposes of NGA § 3(e)(4)’s undue
discrimination provision. Id. On rehearing, the Commission
added that, “[w]hile BP [Energy] and Statoil may face the same
risk that the market for imported natural gas might change, as an
open access customer, BP [Energy] has protections not afforded
Statoil.” Rehearing Order, ¶ 13. The Commission noted that
under NGA § 7, BP Energy has “a regulatory right to release all
or a portion of its terminal service to another shipper” and
“regulatory rights regarding retention of its capacity upon
expiration of its initial service agreement.” Id. Further, the
Commission observed that “[t]he fact that market conditions
might render these rights more or less valuable to BP [Energy]
at any given point in time does not negate the fact that they
exist.” Id.

    We do not understand the Commission to mean that BP
Energy and Statoil are not similarly situated strictly because one
                                 15

receives terminal services pursuant to NGA § 3 while the other
does so pursuant to NGA § 7, for that would come close to
depriving NGA § 3(e)(4)’s protection against undue
discrimination of any legal effect. See Clark v. Rameker, 134 S.
Ct. 2242, 2248-49 (2014). By its plain text, NGA § 3(e)(4)’s
undue discrimination protection applies only where an LNG
terminal that is being authorized to provide services to new
customers under NGA § 3 “also offers service to customers on
an open access basis” under NGA § 7 and pursues differential
treatment between the two. 15 U.S.C. § 717b(e)(4). If the fact
that one customer receives services under NGA § 3 and the
other does so under NGA § 7 was alone sufficient to render any
disparate treatment not unduly discriminatory, then NGA
§ 3(e)(4)’s protection against undue discrimination for an
existing customer in a mixed terminal would never actually bar
differential treatment. Even under the most deferential standard,
an agency cannot read statutory provisions out of existence but
must interpret statutes “so that effect is given to all its provisions
. . . [and] no part will be inoperative or superfluous, void or
insignificant . . . .” Corley v. United States, 556 U.S. 303, 314
(2009) (internal quotation omitted).

    Rather, we understand the Commission to conclude that BP
Energy and Statoil are not similarly situated because of the
specific “protections not afforded Statoil” that BP Energy
receives under NGA § 7, such as release and retention of
contracted-for terminal services. Rehearing Order, ¶ 13. Even
assuming that the Commission has established such protections
are “significant” and “relevant[,]” the Commission has not
adequately explained why they provide a “rational basis” for
permitting the 2012 turn back agreement only to Statoil.
Complex Consol. Edison Co., 165 F.3d at 1012-13. If the
reasonable inference from the challenged orders is that the turn
back opportunity is intended to compensate for the open access
protections provided to BP Energy but not Statoil by NGA § 7,
                               16

then the Commission has not so far demonstrated that Statoil
does not receive the same or comparable benefits under its
contract with Dominion. The Commission acknowledges that
it did not review the Statoil contract, and states now that the
contract terms are “irrelevant” to its determination that BP
Energy and Statoil are not similarly situated, Resp’t’s Br. 79-80.
Maybe so, but the Commission has not explained why.
Knowing whether the terms of Statoil’s contract provide
protections comparable to those afforded customers under NGA
§ 7 — if that is in fact the basis for the Commission’s decision
— does not, on this record, appear “irrelevant.” For example,
Statoil’s contract with Dominion could guarantee release and
retention rights identical to those provided under NGA § 7. For
purposes of the turn back agreement at issue, there then would
appear to be little to no practical difference in the protections
available to each, aside from their source (i.e., a negotiated
contract versus regulatory requirements under NGA § 7). If the
difference in regulatory regimes is relevant in a manner that
would not render NGA § 3(e)(4)’s undue discrimination
provision self-defeating — perhaps, for example, that Statoil
negotiated for its protections while BP Energy did not have to,
or that Statoil was a “foundation shipper” for the 2006
expansion project — the Commission would have had to explain
this in the challenged orders. See Council for Urological
Interests, 790 F.3d at 222. Because the Commission failed to do
so, the court must remand for further explanation.

     Finally, Dominion and Statoil’s suggestion that BP Energy
is barred from relying on the Commission’s failure to analyze
Statoil’s contract is unavailing. BP Energy did not make this
objection before the Commission as would usually be required
by NGA § 19, 15 U.S.C. § 717r(b), but does so here in response
to the Commission’s identification, for the first time on
rehearing, of the “protections not afforded Statoil” in support of
its decision not to order Dominion to offer BP Energy a full turn
                              17

back opportunity. Rehearing Order, ¶ 13. Under the
circumstances, BP Energy has “reasonable ground[s]” for
having failed to raise this objection earlier. See Columbia Gas
Transmission Corp. v. FERC, 477 F.3d 739, 742 (D.C. Cir.
2007) (quoting S. Nat. Gas Co. v. FERC, 877 F.2d 1066, 1072
(D.C. Cir. 1989) (quoting 15 U.S.C. § 717r(b))).

     Accordingly, we remand the case to the Commission for
further explanation of why the 2012 turn back agreement
between Dominion and Statoil was not unduly discriminatory as
to BP Energy under NGA § 3(e)(4). Although we need not reach
BP Energy’s contention that the agreement was an
impermissible “sweetheart deal,” Pet’r’s Br. 38-41, the
Commission may also wish to consider and explain on remand
the extent to which such a deal is relevant to the undue
discrimination analysis.
