 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued March 9, 2017                  Decided July 14, 2017

                       No. 15-1274

             ORANGEBURG, SOUTH CAROLINA,
                     PETITIONER

                             v.

       FEDERAL ENERGY REGULATORY COMMISSION,
                    RESPONDENT


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


    James N. Horwood argued the cause for petitioner. With
him on the briefs were Peter J. Hopkins and Jessica R. Bell.

    Beth G. Pacella, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. On the brief
were Robert H. Solomon, Solicitor, and Karin L. Larson,
Attorney.

   Before: MILLETT and WILKINS, Circuit Judges, and
RANDOLPH, Senior Circuit Judge.

    Opinion for the Court filed by Circuit Judge WILKINS.
                                2
     WILKINS, Circuit Judge: Orangeburg, South Carolina, a
city of approximately 14,000 residents, has been trying to cut a
better deal for wholesale power. The South Carolina city
located a willing supplier in neighboring North Carolina but,
according to Orangeburg, the deal was scuttled by the North
Carolina Utilities Commission (“NCUC”), the state agency
overseeing retail power sales in North Carolina. The Federal
Power Act leaves regulatory authority over retail power sales
to state agencies like NCUC, while reserving authority over
interstate wholesale power sales to the Federal Energy
Regulatory Commission (“FERC” or “Commission”). FERC
v. Elec. Power Supply Ass’n, 136 S. Ct. 760, 766 (2016).
Orangeburg alleges that, in exercising its retail ratemaking
authority, NCUC has interposed itself as a gatekeeper for
access to North Carolina’s most affordable and reliable
wholesale power, thereby intruding upon FERC’s exclusive
jurisdiction. In other words, this case presents one in “a steady
flow of jurisdictional disputes” caused by, “in point of fact if
not of law,” the reality that “the wholesale and retail markets
in electricity are inextricably linked.” Id.

     Orangeburg now challenges FERC’s approval of an
agreement between two utilities. According to Orangeburg,
FERC’s approval of that agreement constitutes an
authorization of NCUC’s unlawful regime. We hold that
Orangeburg has standing to challenge FERC’s approval
because, among other reasons, the city has demonstrated an
imminent loss of the opportunity to purchase a desired product
(reliable and low-cost wholesale power), and because that
injury is fairly traceable to the Commission’s approval of the
agreement at issue. This is especially true in light of the unique
circumstances of this case: FERC has repeatedly sidestepped
the legal issues raised by Orangeburg, thereby acquiescing to
the gatekeeping regime allegedly causing the city’s injury. On
the merits, we conclude that FERC failed to justify its approval
                               3
of the agreement’s disparate treatment of wholesale ratepayers;
to justify the disparity, the Commission relied exclusively on
one line from a previous FERC order that, without additional
explication, appears either unresponsive or legally unsound.
Accordingly, we vacate in part the orders approving the
agreement and denying rehearing, and remand to the
Commission for further explanation.

                               I.

                               A.

     After nearly 100 years of purchasing its wholesale power
from the same utility, Orangeburg tried to cut a better deal. In
2005, in anticipation of the expiration of its existing contract,
Orangeburg informally sought proposals from new power
suppliers. Only one new supplier submitted a proposal: Duke
Energy Carolinas, LLC (“Duke”). In 2008, Orangeburg opted
to switch from its old supplier over to Duke, signing an
agreement for Duke to satisfy the city’s wholesale power needs
for approximately ten years.

     Under the agreement, Duke would have treated
Orangeburg as a native-load customer. “Native load” is an
industry term for customers to whom a power supplier has
undertaken a long-term legal obligation to construct and
operate its system to serve. 18 C.F.R. § 33.3(d)(4)(i). In
practice, a great deal rides on native-load status and the
question of who is, or is not, considered a “native-load
customer” is at the heart of the instant petition. For instance,
as a native-load customer, Orangeburg would pay a lower rate
for wholesale power: the city would pay a rate based on the
lower “system average costs,” instead of the higher
“incremental costs.” Orangeburg anticipated that, as a native-
load customer under this agreement, the city would have been
                               4
able to pass on approximately $10 million in savings per year
to its own retail customers.

     But the agreement faced a significant hurdle: NCUC, the
state agency overseeing retail power sales in North Carolina.
Years earlier, as a condition for approving Duke’s merger with
another utility, NCUC imposed several regulatory conditions
on Duke’s future power sales. See Order Approving Merger
Subject to Regulatory Conditions and Code of Conduct, Docket
No. E-7, Sub 795, 2006 N.C. PUC LEXIS 296, at *200-19
(N.C. Utils. Comm’n Mar. 24, 2006). As relevant here, NCUC
imposed, and Duke accepted, two sets of conditions. First,
Duke agreed to continue serving its “lowest-cost power” to
retail native-load customers in North Carolina, and to plan its
system with an eye toward providing those customers the most
reliable and lowest cost power. Id. at *206-07 (Regulatory
Conditions 5 and 6). Second, Duke agreed to provide notice to
NCUC if the utility intended to treat any new wholesale
customer as a native-load customer, and NCUC reserved the
right to decide for itself whether to recognize that native-load
status when it came to its own retail ratemaking, accounting,
and reporting. Id. at *207-12 (Regulatory Condition 7).

     Accordingly, when Duke agreed to treat Orangeburg as a
native-load wholesale customer, Duke notified NCUC. In
response, NCUC issued a declaratory ruling that “[i]n any
future retail ratemaking proceeding,” the commission would
not recognize Orangeburg’s native-load status and,
consequently, would account for Duke’s revenue from
Orangeburg as though it were “based upon incremental costs,”
instead of the lower “system average costs” provided for in the
agreement. Order on Advance Notice and Joint Petition for
Declaratory Ruling, Docket No. E-7, Sub 858, 2009 WL
904943 (N.C. Utils. Comm’n Mar. 30, 2009) (hereinafter,
“2009 NCUC Declaratory Ruling”), J.A. 207. In other words,
                                 5
when NCUC set rates for North Carolina retail customers, it
would act as though Duke were receiving more wholesale
revenue from Orangeburg than it actually was; the commission
would “impute” revenue. This ostensibly minor accounting
decision regarding retail power sales within North Carolina
had a major impact on the Duke-Orangeburg wholesale power
deal.

     The mechanics of how this imputation in one domain
(retail) can affect another domain (wholesale) is not plainly
obvious, and so an analogy will hopefully help. Consider the
following. A North Carolina university program costs $500
per month to maintain. A state agency mandates that students
born in North Carolina must be charged the lowest rate
possible, in light of the $500-per-month cost. The program has
four current students, each of whom was born in North
Carolina. Accordingly, the agency permits the university to
collect $125 from each student ($500 divided by four). The
next month, the program enrolls a fifth student who was born
in South Carolina, promising to treat her the same as the
current North Carolina-born students. Under this arrangement,
the university would collect $100 from each student ($500
divided by five). But the state agency then declares that, in
calculating the appropriate fees for the four North Carolina
students, it would impute an amount of $300 – not $100 – as
the fees collected from the new South Carolina student. Based
on the agency’s accounting, the North Carolina students would
pay only $50 each ($500 cost minus $300 in imputed revenue,
with the difference of $200 divided by the four North Carolina
students). If the university were to stick to the agreement to
treat the fifth student the same as the first four, it would collect
only $250 in total fees ($50 from each of the five students).
The difference between the $500 cost and the $250 in actual
revenue are “trapped costs,” and those trapped costs render the
new agreement economically infeasible. The university, acting
                               6
rationally, would try to get out of its agreement with the fifth
student from South Carolina. The key lesson to draw is this:
even if the state agency neither enjoys nor exercises direct
regulatory authority over the South Carolina student’s fees, the
agency can nonetheless frustrate the deal struck by the
university and the new student.

      Something similar happened here, according to
Orangeburg. The 2009 NCUC Declaratory Ruling provided
that the state commission would, for North Carolina retail
ratemaking purposes, decline to treat Orangeburg – a South
Carolina wholesale customer – as native load. The critical fact
is that native-load customers enjoyed a special, lower rate
(based on system average, not incremental, costs).
Consequently, when NCUC set rates for retail customers, the
state commission would account for revenue from Orangeburg
as being greater than Duke actually collected. The difference
between the higher, imputed amount and the lower, agreed-
upon amount generated “trapped costs,” which soured the
whole Duke-Orangeburg deal. Shortly after the 2009 NCUC
Declaratory Ruling, Duke invoked a “regulatory out” provision
(i.e., an escape clause) in the agreement. Consequently,
Orangeburg was forced to return to its old power supplier. This
dynamic, according to Orangeburg, empowers NCUC to act as
the gatekeeper for reliable and low-cost wholesale power from
North Carolina-based utilities, where the state commission
leverages the knock-on effects of its retail accounting decisions
to control which wholesale customers enjoy the benefits of
native-load status.

    In July 2009, Orangeburg filed a petition with FERC,
requesting that the Commission find that the 2009 NCUC
Declaratory Ruling “does not apply to [Orangeburg] . . . by
reason of federal preemption . . . .” City of Orangeburg, S.C.,
151 FERC ¶ 61,241, at 62,596 (2015), J.A. 223. In short,
                              7
Orangeburg argued that the “2009 NCUC [Declaratory Ruling]
intrudes upon [FERC]’s exclusive jurisdiction over wholesale
rates pursuant to the [Federal Power Act].” Id. at 62,597, J.A.
225.     Orangeburg’s petition languished for six years.
Eventually, in 2015, FERC dismissed the petition without
addressing the merits, holding that because “Orangeburg and
Duke voluntarily terminated the Agreement following the 2009
NCUC [Declaratory Ruling],” the petition was moot. Id. at
62,601, J.A. 232. FERC, in other words, declined to pass on
the legality of NCUC’s purported gatekeeping role that,
according to Orangeburg, thwarted – and continues to thwart –
the city’s ability to purchase interstate wholesale power from
North Carolina utilities like Duke.

                              B.

    The controversy over NCUC’s actions did not end there.
In 2011, Duke’s parent company, Duke Energy Corporation,
sought to merge with Progress Energy, Inc. Duke Energy
Corp., 136 FERC ¶ 61,245 (2011). As part of that merger, the
two parent companies filed with FERC a Joint Dispatch
Agreement (“JDA”), which would govern the interstate
dispatch of power from the generation systems of their
subsidiaries, Duke and Progress Energy Carolinas, Inc.
(“Progress”).

    The JDA incorporated the NCUC regulatory conditions
that allegedly thwarted the 2008 Duke-Orangeburg deal.
Specifically, Section 3.2(c) provided that Duke and Progress
would not: (1) “make or incur a charge” unless in accordance
with “orders of the NCUC;” (2) “seek to reflect in its North
Carolina retail rates” any cost disallowed by NCUC or “any
revenue level . . . other than the amount imputed by the
NCUC;” nor (3) “assert in any forum” that NCUC’s authority
to impute revenue is preempted. Joint Dispatch Agreement
                               8
Between Duke Energy Carolinas, LLC and Carolina Power &
Light Co. at 4-5 (hereinafter, “Joint Dispatch Agreement”),
J.A. 15-16. Importantly, the JDA further embedded the
distinction between native-load and non-native-load
customers, providing that only the former would be entitled to
the most reliable and lowest cost power. Id. at 5-6 (Article V),
J.A. 16-17; id. at 8 (Article VII), J.A. 19; see also id. at 2
(Article I, Definitions), J.A. 13.

     In June 2012, over Orangeburg’s protest, FERC approved
the JDA in substantial part. Duke Energy Corp., 139 FERC
¶ 61,193 (2012) (hereinafter, “JDA Approval Order”), J.A.
118-35. Two grounds for the city’s protest are relevant here.
First, Orangeburg argued that Section 3.2(c) of the JDA, which
effectively incorporated the NCUC regulatory regime, “will
result in [NCUC]’s usurpation of [FERC]’s exclusive
jurisdiction over wholesale sales.” Id. at 62,324, J.A. 126-27.
In its JDA Approval Order, FERC directed the applicants to
remove the problematic provisions of Section 3.2(c) because
they “pertain[ed] fundamentally to retail ratemaking,” but the
Commission continued to “offer no view on [NCUC]’s
authority to impose or apply such requirements in its
proceedings.” Id. at 62,325, J.A. 130. In other words, when
faced squarely with Orangeburg’s continuing complaints
regarding NCUC’s regulatory regime, FERC again declined to
weigh in.

     Second, Orangeburg argued that the JDA would
“arbitrarily divide Duke’s and [Progress]’s wholesale sales
into native load and non-native load categories and permit
[NCUC] to decide which wholesale customers fall into each
category,” thereby enabling Duke, Progress, and NCUC “to
unduly discriminate against wholesale customers.” Id. at
62,326, J.A. 131. FERC rejected that argument as well,
relying solely on its past decision, Order No. 2000. Id. at
                                   9
62,327 (citing Reg’l Transmission Orgs., Order No. 2000,
FERC Stats. & Regs. ¶ 31,089 (1999), order on reh’g, Order
No. 2000-A, FERC Stats. & Regs. ¶ 31,092 (2000), aff’d sub
nom. Pub. Util. Dist. No. 1 of Snohomish Cnty., Wash. v.
FERC, 272 F.3d 607 (D.C. Cir. 2001) (hereinafter, “Order No.
2000”)), J.A. 133-34. In three sentences, the Commission
summarily explained that Order No. 2000 affirms a state
agency’s authority to require utilities, like Duke and Progress,
to accord preferential treatment to native-load wholesale
customers. Accordingly, the Commission approved “[t]he
JDA’s allocation of lowest cost power to the native load
customers of [Duke] and [Progress] . . . .” Id., J.A. 134. 1

    Orangeburg then filed a request for rehearing, which
FERC denied. Duke Energy Corp., 151 FERC ¶ 61,242
(2015) (hereinafter, “Rehearing Order”), J.A. 179-187.
Orangeburg now petitions for review of both the JDA
Approval Order and the Rehearing Order.

                                  II.

      At the outset, FERC interposes a threshold objection to
Orangeburg’s petition, arguing that Orangeburg lacks Article
III standing.

    Article III standing is both a constitutional and statutory
requirement for reviewing the instant petition.          As a
constitutional matter, we must assure ourselves that this is the
type of dispute susceptible of judicial resolution and
appropriate for the exercise of judicial power. Lujan v.

1
   FERC did, however, take issue with the JDA’s distinction between
“existing non-native-load customers over new non-native load
customers[,]” and conditionally approved the JDA, subject to the removal
of that distinction. Id., J.A. 134.
                               10
Defenders of Wildlife, 504 U.S. 555, 559-61 (1992). As a
statutory matter, the Federal Power Act affords judicial review
only to those parties “aggrieved” by an order issued by FERC,
16 U.S.C. § 825l(b), and a party is “aggrieved” only if it has
Article III standing. La. Energy & Power Auth. v. FERC, 141
F.3d 364, 366 (D.C. Cir. 1998). To satisfy these twin demands,
Orangeburg “must show an actual or imminent injury in fact,
fairly traceable to the challenged agency action, that will likely
be redressed by a favorable decision.” Exxon Mobil Corp. v.
FERC, 571 F.3d 1208, 1219 (D.C. Cir. 2009) (citing Lujan, 504
U.S. at 560-61). We will address the three elements of Article
III standing – injury, causation, and redressability – in turn.

                               A.

     Orangeburg suffered an injury-in-fact because it cannot
purchase wholesale power on its desired terms. “This Court
has permitted consumers of a product to challenge agency
action that prevented the consumers from purchasing a desired
product.” Coal. for Mercury-Free Drugs v. Sebelius, 671 F.3d
1275, 1281 (D.C. Cir. 2012); see, e.g., Chamber of Comm. v.
SEC, 412 F.3d 133, 136-38 (D.C. Cir. 2005) (lost opportunity
to purchase shares in mutual funds with fewer than 75%
independent directors); Consumer Fed’n of Am. v. FCC, 348
F.3d 1009, 1011-12 (D.C. Cir. 2003) (high-speed internet);
Competitive Enter. Inst. v. Nat’l Highway Traffic Safety
Admin., 901 F.2d 107, 112-13 (D.C. Cir. 1990) (larger
vehicles); Ctr. for Auto Safety v. Nat’l Highway Traffic Safety
Admin., 793 F.2d 1322, 1332-34 (D.C. Cir. 1986) (more fuel-
efficient vehicles).

    The lost opportunity to purchase a desired product is a
cognizable injury, even though Orangeburg can purchase, and
has purchased, wholesale power from another source. “[T]he
inability of consumers to buy a desired product may constitute
                               11
injury-in-fact even if they could ameliorate the injury by
purchasing some alternative product.” Consumer Fed’n of
Am., 348 F.3d at 1012 (emphasis added) (internal quotation
marks omitted). In Consumer Federation, for example, we
held that even though the plaintiffs “could obtain high-speed
internet access” from another source, they nonetheless suffered
an injury-in-fact because they could not obtain that access from
the internet service provider of their choice. Id. Likewise, even
though Orangeburg can and does purchase wholesale power
from another source, the city cannot purchase wholesale power
from the provider of its choice nor on its preferred terms –
Orangeburg wants to purchase wholesale power from Duke as
a native-load customer. This matters. Under the terms of the
JDA, native-load status means that the customer will receive
both the most reliable and lowest cost power. See Joint
Dispatch Agreement at 5-6 (most reliable), J.A. 16-17; id. at 8-
10 (lowest cost), J.A. 19-21. Indeed, the harm of the lost
opportunity is quantifiable: in 2008, the switch to an
agreement treating Orangeburg as a native-load customer was
projected to save the city’s retail customers approximately $10
million per year. In short, Orangeburg’s lost opportunity to
purchase wholesale power as a native-load customer – i.e., to
purchase the most reliable and lowest cost power – is an injury-
in-fact. See Chamber of Comm., 412 F.3d at 138.

     An injury must, of course, be “actual or imminent, not
conjectural or hypothetical.” Lujan, 504 U.S. at 560 (quotation
marks omitted); accord Whitemore v. Arkansas, 495 U.S. 149,
158 (1990) (“A threatened injury must be ‘certainly
impending’ to constitute injury in fact.”). FERC observes that
Orangeburg’s current wholesale power contract does not expire
for another five years. This observation is correct, as is the
Commission’s further observation that Orangeburg has yet to
seek out a new contract. But as Commissioner Moeller
explained in his dissent to FERC’s 2015 dismissal of
                                 12
Orangeburg’s petition, it is impractical to negotiate such
complex transactions this far in advance. City of Orangeburg,
S.C., 151 FERC at 62,602-03 (Moeller, dissenting), J.A. 240.

     Moreover, “[s]tanding depends on the probability of harm,
not its temporal proximity.” 520 Mich. Ave. Assocs. v. Devine,
433 F.3d 961, 962 (7th Cir. 2006). With the impending
expiration of its current agreement in 2022, Orangeburg will
need to secure a new bilateral power purchase agreement:
because the Southeastern states, including the Carolinas, have
not restructured their electric utilities, “virtually all the physical
sales in the Southeast are done bilaterally.” FERC, Electric
Power Markets: Southeast, https://www.ferc.gov/market-
oversight/mkt-electric/southeast.asp (last updated March 10,
2016). Orangeburg’s historical practice has been to solicit
proposals for such arrangements two or three years before the
expiration of its existing contract; so the city will solicit
proposals again in 2019 or 2020. As it did the last time it was
on the market for a new power deal, Orangeburg will try to
secure the best terms it can.

     Under the FERC-approved JDA, Duke and Progress’s best
terms are reserved for native-load customers. Joint Dispatch
Agreement at 5-6, J.A. 16-17; id. at 8-10, J.A. 19-21. But in
2011, James Rogers, then-CEO of Duke’s parent company,
testified that Duke’s willingness to grant native-load status to a
new customer, like Orangeburg, is a function of whether
NCUC recognizes that status. Pub. Serv. Comm’n of S.C.
Testimony Tr. at 57:10-12, J.A. 114. In turn, NCUC has
declared that in future proceedings, the state commission
would not treat Orangeburg as a native-load customer. 2009
NCUC Declaratory Ruling, 2009 WL 904943, J.A. 207.
Therefore, in 2019 or 2020, Orangeburg will again lose the
opportunity to purchase wholesale power from Duke as a
native-load customer, absent some intervening event.
                                 13
     But the prospect of such an event is not at all promising
for Orangeburg. The last time around, after Orangeburg timely
initiated efforts to obtain a new contract with Duke, FERC sat
on Orangeburg’s past petition for declaratory relief for six
years before dismissing the petition without addressing the
merits, allowing time to moot the city’s claim. City of
Orangeburg, S.C., 151 FERC at 62,596, J.A. 223. Such
exceptional delay and foot-dragging by the Commission in a
time-sensitive matter has to be factored in to the analysis of the
imminence of Orangeburg’s injury. If the city waits for relief
until it starts contract negotiations in 2019, there is a substantial
risk that it will again be too late to obtain timely review from
FERC. We therefore cannot look solely to the ordinary process
of contract negotiation in this case; the injury is more pressing
because the contracting process has to start early enough to
permit timely FERC review. In effect, what Orangeburg seeks
to do here is reverse the order of the two steps of its contracting
process – obtaining the legal authority to contract from FERC
before expending extensive time and resources to secure a new
power purchase agreement. In addition, the need for review of
the Commission’s decision is pressing now because, until the
status of the JDA and its approval of the NCUC non-native load
rules is straightened out by FERC, North Carolina utilities will
very likely be unwilling to even begin the negotiation process
with the city, knowing that the process will not end in an
economically viable deal. Consequently, this is an unusual
case where FERC’s exceptional delay has necessitated
resolving these legal issues as the first step of facilitating the
forthcoming contracting process in the manner that
Orangeburg alleges the law requires. That makes the injury
and need for the Commission’s decision sufficiently imminent
for Article III purposes.

    Orangeburg will seek a new agreement in the next few
years, and when it does, the city will relive its experience from
                               14
2008, when the Duke-Orangeburg deal was undone. The
FERC-approved JDA reserves the most reliable and lowest cost
power to native-load customers, Duke looks to NCUC to
determine who will be treated as such a customer, and NCUC
has declared that Orangeburg will not be. Against the unusual
backdrop of long delay and continued inaction on FERC’s part,
we conclude that Orangeburg has demonstrated an “imminent”
or “certainly impending” risk of losing out on the opportunity
to purchase its desired product – the most reliable and lowest
cost power from Duke.

                               B.

     Turning to the causation element of standing,
Orangeburg’s lost “opportunity to purchase a desired product”
is caused by, or fairly traceable to, FERC’s approval of the
JDA. “Causation, or ‘traceability,’ examines whether it is
substantially probable that the challenged acts of the defendant,
not of some absent third party, will cause the particularized
injury of the plaintiff.” Fla. Audubon Soc’y v. Bentsen, 94 F.3d
658, 663 (D.C. Cir. 1996) (en banc) (citations omitted).

     FERC contends that the causation element is not satisfied
because Orangeburg’s injury is actually caused by NCUC, an
absent third party, not the Commission. To be sure, NCUC –
a non-party – is a key player in the causal story. But the
existence of, perhaps, an equally important player in the story
does not erase FERC’s role. See, e.g., Bennett v. Spear, 520
U.S. 154, 168-69 (1997) (rejecting the proposition that
causation attributable to “the very last step in the chain of
causation” negates causation attributable to a “determinative”
step earlier in the chain); Karst Envtl. Educ. & Prot., Inc. v.
EPA, 475 F.3d 1291, 1293-95 (D.C. Cir. 2007) (holding that
two agencies “caused” an Article III injury by providing $5.5
million to fund an $80 million infrastructure project, where the
                              15
project was principally funded and managed by numerous non-
parties); see also 13A CHARLES ALAN WRIGHT, ARTHUR R.
MILLER & EDWARD H. COOPER, FEDERAL PRACTICE &
PROCEDURE § 3531.5, at 311-15 (3d ed. 2008) (“It may be
enough that the defendant’s conduct is one among multiple
causes.”).

     In fact, “Supreme Court precedent establishes that the
causation requirement for constitutional standing is met when
a plaintiff demonstrates that the challenged agency action
authorizes the conduct that allegedly caused the plaintiff’s
injuries, if that conduct would allegedly be illegal otherwise.”
Animal Legal Def. Fund, Inc. v. Glickman, 154 F.3d 426, 440
(D.C. Cir. 1998) (en banc). According to Orangeburg, when
FERC approved the JDA, it expressly authorized Duke’s
preferential treatment of native-load customers, and implicitly
authorized NCUC’s role as the gatekeeper for that preferential
treatment. Together, this FERC-approved conduct, according
to Orangeburg, will prevent the city from purchasing Duke’s
most reliable and lowest cost power. This theory of causation
rests on two premises: (1) FERC’s approval of the JDA
“authorized” the conduct that will prevent Orangeburg from
purchasing Duke’s most reliable and lowest cost power, and (2)
“that conduct would allegedly be illegal otherwise.” Id.

     With respect to the first premise, FERC’s approval of the
JDA constitutes “authorization” of the cause of Orangeburg’s
injury in two interlocking ways: FERC approved the JDA’s
preferential treatment of native-load customers, and declined to
preempt NCUC’s alleged gatekeeping regime. First, the cause
of Orangeburg’s injury begins with the fact that wholesale
customers are treated differently based on their native-load
status, and FERC expressly approved that disparate treatment.
The JDA divides the world into two categories of customer:
native load and non-native load. Only native-load customers –
                              16
including wholesale customers – enjoy access to the most
reliable and lowest cost power. Joint Dispatch Agreement at
5-6, J.A. 16-17; id. at 8-10, J.A. 19-21. Orangeburg wants to
purchase wholesale power on those favorable terms, but cannot
because Duke will not treat the city as a native-load customer
as long as NCUC disapproves. Pub. Serv. Comm’n of S.C.
Testimony Tr. at 57:10-12 (Duke Parent CEO Testimony), J.A.
114. If the JDA did not provide for the disparate treatment of
native-load and non-native-load customers, Orangeburg’s
problems would be reduced; wholesale customers, native load
or not, would enjoy equal access to Duke’s most reliable and
lowest cost power. But the JDA does feature such a distinction
and, critically, FERC approved it. JDA Approval Order, 139
FERC at 62,327, J.A. 133-34. And the Commission did not
have to: for example, it could have disapproved those
provisions as unjust, unreasonable, unduly discriminatory, or
preferential, 16 U.S.C. §§ 824d(b), 824e(a), as it did for other
provisions of the JDA regarding native-load status, JDA
Approval Order, 139 FERC at 62,327, J.A. 134. By approving
the JDA’s allocation of the most reliable and lowest cost power
to native-load customers, FERC “authorize[d] the conduct that
allegedly caused” Orangeburg’s loss of an opportunity to
purchase the product it desires. Glickman, 154 F.3d at 440.

     Second, FERC declined to preempt NCUC’s alleged
gatekeeping regime, which was incorporated into the JDA and
is allegedly preventing Orangeburg from being treated as a
native-load customer. As submitted, the JDA included
provisions that incorporated NCUC’s regulatory regime: Duke
and Progress agreed to follow all NCUC orders, to accept any
revenue amount imputed by NCUC, and to refrain from
arguing that NCUC’s actions are preempted by federal law.
Joint Dispatch Agreement at 4-5, J.A. 15-16. Orangeburg
argued that those provisions would result in NCUC’s
“usurpation of the Commission’s exclusive jurisdiction over
                               17
wholesale sales.” JDA Approval Order, 139 FERC at 62,324,
J.A. 127. In response, FERC directed the parties to remove
those provisions because they “pertain[ed] fundamentally to
retail ratemaking,” while continuing to “offer no view on
[NCUC]’s authority to impose or apply such requirements in
its proceedings.” Id. at 62,325, J.A. 130. But in a sense, the
Commission was offering a view on NCUC’s authority:
contrary to Orangeburg’s protest, FERC concluded that the
provisions incorporating the state regulatory regime
“pertain[ed] fundamentally to retail ratemaking.”             Id.
(emphasis added). Had FERC found that those provisions and
the state regime pertained to wholesale ratemaking, the
Commission could have, as it concedes, preempted NCUC’s
regulatory requirements. Resp.’s Br. at 34 (citing United
Distrib. Cos. v. FERC, 88 F.3d 1105, 1156 (D.C. Cir. 1996)).
Indeed, Orangeburg implored FERC to do so, as the
Commission has in the past. See, e.g., Cal. Pub. Utils.
Comm’n, 132 FERC ¶ 61,047, at 61,337-38 (2010). But FERC
did not. Despite the opportunity to squarely settle the matter
by either preempting NCUC’s regulatory regime or explaining
why the regime was in harmony with federal law, FERC
attempted to sidestep the issue by ordering the parties to simply
omit the troublesome provisions.

     FERC’s approach to the JDA fits within a pattern of
acquiescence. Shortly after the 2008 Duke-Orangeburg deal
was frustrated by the 2009 NCUC Declaratory Ruling,
Orangeburg filed a petition with FERC requesting that the
Commission find that NCUC’s ruling was preempted by
federal law. City of Orangeburg, S.C., 151 FERC at 62,596,
J.A. 223. Even now, FERC insists that this proceeding – and
not the JDA proceeding – was the appropriate “vehicle to
address Orangeburg’s preemption and other challenges to
[NCUC]’s ‘regulatory conditions.’” Respondent’s Br. at 37.
Conveniently, FERC glosses over the fact that it sat on
                              18
Orangeburg’s petition for six years, waiting until 2015, when
time had mooted the issue, to dismiss the petition without
addressing the merits. This repeated acquiescence and refusal
to settle the matter contributes to the bigger picture of FERC’s
authorization of NCUC’s conduct.

     Apparently, that is how NCUC interprets FERC’s
behavior too. In 2012, NCUC approved the merger of Duke
and Progress’s parent companies. See Order Approving
Merger Subject to Regulatory Conditions and Code of
Conduct, Docket Nos. E-2, Sub 998, E-7, Sub 986, 2012 WL
2590482 (N.C. Utils. Comm’n June 29, 2012). In approving
the merger, NCUC addressed the same arguments raised by
Orangeburg here:       “The primary argument underlying
Orangeburg’s challenges before FERC is that [NCUC] is acting
as gatekeeper to [Duke]’s and [Progress]’s wholesale sales and
will continue to do so under the proposed regulatory
conditions.” Id. But, NCUC reasoned, these arguments cannot
have merit because, “[w]ere Orangeburg correct in its
repeatedly made arguments that [NCUC] is intruding upon
FERC’s exclusive jurisdiction, FERC would be expected to
agree with them.” Id. Since FERC has not ruled on the matter,
NCUC interpreted FERC’s inaction as a green light to continue
implementing its allegedly unlawful regulatory regime.

     In short, with respect to the first Glickman premise,
FERC’s approval of the JDA “authorize[d] the conduct that
allegedly caused the plaintiff’s injuries” in two interlocking
ways. Glickman, 154 F.3d at 440. First, FERC loaded the gun
by affirmatively approving provisions in the JDA that reserve
the most reliable and lowest cost power for native-load
customers. Second, as part of a pattern of acquiescence, FERC
let NCUC grab hold of the gun by declining to preempt the state
regulatory regime that was incorporated into the JDA.
Together, these two actions “authorized” conduct by Duke,
                              19
Progress, and NCUC that allegedly will cause Orangeburg to
lose the opportunity to purchase its desired product – the most
reliable and lowest cost power.

     With respect to the second Glickman premise – that the
FERC-authorized conduct “would allegedly be illegal” –
Orangeburg has demonstrated both that the FERC-approved
JDA would allegedly violate the Federal Power Act, and that
the NCUC regulatory regime incorporated into the JDA would
allegedly violate the Commerce Clause. First, as we discuss in
greater detail below, it is at least plausible that the FERC-
approved JDA’s preferential treatment of native-load
wholesale customers would be “unduly discriminatory” under
the Federal Power Act. See 16 U.S.C. § 824e(a). The JDA
provides that the most reliable and lowest cost power will be
reserved for native-load wholesale customers, and such
disparate treatment would be inappropriate without “a valid
reason for the disparity.” Black Oak Energy, LLC v. FERC,
725 F.3d 230, 239 (D.C. Cir. 2013) (internal quotation marks
omitted). According to Orangeburg, there is no “valid reason.”
Therefore, for the purposes of standing, the JDA’s preferential
treatment of native-load wholesale customers “would allegedly
be illegal” without FERC’s approval. See Glickman, 154 F.3d
at 440.

    Second, Orangeburg alleges that NCUC, through its
imputation of wholesale revenue in retail ratemaking, prevents
the sale of low-cost North Carolina power to out-of-state
wholesale customers, in an effort to privilege in-state retail
customers. These allegations bear some resemblance to New
England Power Co. v. New Hampshire, in which New
Hampshire’s utility commission prohibited the out-of-state
exportation of hydroelectric power because that power was
“required for use within the state” and the prohibition would
serve the “public good.” 455 U.S. 331, 335-36 (1982). The
                              20
Supreme Court explained that the Commerce Clause
“precludes a state from mandating that its residents be given a
preferred right of access, over out-of-state consumers, to
natural resources located within its borders or to the products
derived therefrom.” Id. at 338. The New Hampshire
commission’s order was “precisely the sort of protectionist
regulation that the Commerce Clause declares off-limits to the
states.” Id. at 339. Likewise, according to Orangeburg,
NCUC’s regulatory requirements are protectionist regulations
that violate the Commerce Clause. Therefore, for the purposes
of standing, Orangeburg has demonstrated that the NCUC
regulatory regime “would allegedly be illegal” without FERC’s
authorization. See Glickman, 154 F.3d at 440; see also New
England Power, 455 U.S. at 338-39; Pub. Utils. Comm’n of R.I.
v. Attleboro Steam & Elec. Co., 273 U.S. 83, 89 (1926) (“Being
the imposition of a direct burden upon interstate commerce,
from which the state is restrained by the force of the Commerce
Clause, it must necessarily fall, regardless of its purpose.”).

     In sum, the causation element of standing is satisfied
because Orangeburg has “demonstrate[d] that the challenged
agency action authorizes the conduct that allegedly caused the
plaintiff’s injuries,” and “that conduct would allegedly be
illegal otherwise.” Glickman, 154 F.3d at 440. Orangeburg’s
injury – the loss of the opportunity to purchase Duke’s most
reliable and lowest cost power – is “allegedly caused” by the
JDA’s preferential treatment of native-load customers and
NCUC’s control over which customers enjoy native-load
status. FERC “authorized” that conduct by approving JDA
provisions that accorded preferential treatment for native-load
customers, and by declining to preempt the JDA-incorporated
regulatory regime that allegedly empowered NCUC to exercise
control over which wholesale customers enjoy native-load
status. Without FERC’s authorization, that conduct “would
allegedly be illegal” because the preferential treatment of
                               21
native-load customers might be “unduly discriminatory” under
the Federal Power Act and NCUC’s control over native-load
status might violate the Commerce Clause. Therefore, we
conclude that Orangeburg has satisfied the causation element
of Article III standing.

                               C.

     Finally, we turn to the redressability element of Article III
standing, which Orangeburg has also satisfied. FERC does not
mount a redressability attack on Orangeburg’s standing, but
this Court must nonetheless assure itself that all of the
conditions of standing obtain. See Steel Co. v. Citizens for a
Better Envmt., 523 U.S. 83 (1998).

     “Redressability examines whether the relief sought,
assuming that the court chooses to grant it, will likely alleviate
the particularized injury alleged by the plaintiff.” Fla.
Audubon Soc’y, 94 F.3d at 663-64 (footnote omitted). There
may be multiple ways in which a favorable decision is likely to
redress Orangeburg’s injury, but at least one is certain and
undisputed: this Court could – itself – conclude that the JDA
enacts a regime in which NCUC is empowered to act as a
gatekeeper for interstate wholesale power transactions, in
violation of the Federal Power Act or the Commerce Clause.
See, e.g., Nantahala Power and Light Co. v. Utils. Comm’n of
N.C., 476 U.S. 953, 967-73 (1986) (holding that NCUC’s
failure to honor FERC-filed rates for the purposes of retail
ratemaking caused trapped costs and was preempted by the
Federal Power Act); Attleboro, 273 U.S. at 89 (invalidating a
Rhode Island regulation as a “direct burden upon interstate
commerce”). We could then vacate the order. Such a
determination would diminish the obstacles preventing
Orangeburg from accessing the most reliable and lowest cost
power from Duke. Faced with such a decision from a federal
                               22
court, NCUC is unlikely to maintain its policy of setting retail
rates for out-of-state entities so as to create trapped costs. Cf.
Nat’l Parks Conserv. Ass’n v. Manson, 414 F.3d 1, 6-7 (D.C.
Cir. 2005). Therefore, if we were to “choose[] to grant” the
relief sought, such relief would “likely alleviate” Orangeburg’s
injury. See Fla. Audubon Soc’y, 94 F.3d at 663-64.

     We pause to emphasize the unique and unusual posture of
the instant petition. Orangeburg has persistently implored
FERC to settle the question of whether NCUC’s actions are
lawful. FERC has persistently avoided the issue. Most
notably, the Commission channeled all NCUC-related
objections to a declaratory order proceeding, which it then
delayed for six years before dismissing the underlying petition
as moot. Aside from the unfairness of exiling Orangeburg to
legal limbo, this context affects the standing analysis:
Orangeburg’s injury is made more imminent by the
unlikelihood that FERC will intervene and ameliorate the
harm; and, as to causation, FERC’s repeated acquiescence to
the NCUC regime bolsters the case that the Commission
“authorized” the conduct that is allegedly causing
Orangeburg’s injury. Against this unusual backdrop, we
conclude that Orangeburg has “show[n] an . . . imminent injury
in fact, fairly traceable to the challenged agency action, that
will likely be redressed by a favorable decision.” Exxon Mobil
Corp., 571 F.3d at 1219.

                               III.

    We turn now to the merits of the petition. In its protest of
the JDA, Orangeburg advanced the arguments we discussed
above. In short, Orangeburg argued:

    The executed JDA, in conjunction with [the] new
    State Regulatory Conditions filed at the NCUC, will
    allow the NCUC to use its retail ratemaking authority
                                23
     to effect a multistate geographic market allocation of
     Duke’s and Progress’s average system cost power.
     NCUC-favored wholesale customers will be able to
     purchase and obtain an economic and long-term
     supply of power from Duke or Progress; NCUC-
     disfavored wholesale customers will not. Such a
     result is contrary to the free flow of goods in
     interstate commerce, the purpose of the Federal
     Power Act (“FPA”) and FERC’s policy of increased
     competitive wholesale markets.

Motion to Intervene and Protest of the City of Orangeburg,
South Carolina, at 6 (June 16, 2012) (footnote omitted), J.A.
37.

     If FERC finds that a “rule, regulation, practice, or contract
affecting [a FERC-jurisdictional] rate, charge, or classification
is unjust, unreasonable, unduly discriminatory or preferential,
the Commission shall determine the just and reasonable rate . .
. and shall fix the same by order.” 16 U.S.C. § 824e(a); accord
Elec. Power Supply Ass’n, 136 S. Ct. at 767. “We accept
disparate treatment between ratepayers only if FERC offers a
valid reason for the disparity.” Black Oak Energy, 725 F.3d at
239 (alterations and internal quotation marks omitted). Unless
FERC offers such a valid reason, its decision to approve
disparate treatment of wholesale ratepayers is “arbitrary and
capricious.” See id. at 237; Motor Vehicle Mfrs. Ass’n of the
U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1984) (holding that in order to survive review under the
“arbitrary and capricious” standard, “the agency must examine
the relevant data and articulate a satisfactory explanation for its
action including a rational connection between the facts found
and the choice made” (internal quotation marks omitted)).
                              24
     At issue here, FERC approved provisions of the JDA that
established disparate treatment between native-load and non-
native-load wholesale customers. According to Orangeburg,
these JDA provisions operate against the backdrop of NCUC’s
functional veto over which wholesale customers fit into the
former category. Therefore, in order to survive review, FERC
must have “offer[ed] a valid reason for the disparity” between
native-load and non-native-load wholesale customers under
these circumstances. Black Oak Energy, 725 F.3d at 239
(internal quotation marks omitted).

    FERC’s response to Orangeburg’s protest was brief
enough to quote here in full. The Commission explained:

    We find that the allocation of the lowest cost energy
    under the JDA to the native load customers of [Duke]
    and [Progress] is not unduly discriminatory. In
    Order No. 2000, the Commission acknowledged that
    in areas without retail choice, state commissions
    have the authority to “require a utility to sell its
    lowest cost power to native load, as they always
    have.” The JDA’s allocation of lowest cost power to
    the native load customers of [Duke] and [Progress] is
    consistent with this finding.

JDA Approval Order, 139 FERC at 62,327 (alterations and
footnote omitted) (quoting Order No. 2000), J.A. 133-34. In
short, the extent of FERC’s response to Orangeburg’s
overlapping Federal Power Act, preemption, and Commerce
Clause arguments was to refer to Order No. 2000; all the heavy
lifting is done implicitly by the Commission’s interpretation of
the Order. FERC’s order denying rehearing was no better. See
generally Rehearing Order, 151 FERC ¶ 61,242, J.A. 179-187.

   Although we accord “substantial deference” to the
Commission’s interpretation of its own orders, Consumers
                                 25
Energy Co. v. FERC, 428 F.3d 1065, 1067-68 (D.C. Cir. 2005),
FERC’s exclusive reliance on Order No. 2000 is untenable. On
its face, the Order does not supply a reason for the JDA’s
disparate treatment of native-load and non-native-load
interstate wholesale customers, especially in light of NCUC’s
alleged control over which customers enjoy native-load status.

      Order No. 2000 was a rule designed to promote regional
transmission organizations. 2 Pub. Util. Dist. No. 1, 272 F.3d at
609. “In response to the concern of low cost states that
[regional transmission organizations] could result in exports of
their low cost power to other states,” the Commission
explained, “[w]here there is no retail choice, our Final Rule
does not affect a state commission’s authority to require a
utility to sell its lowest cost power to native load, as it always
has.” Order No. 2000, 89 FERC ¶ 61,285, at *254.

     This brief passage cannot, without more explanation, be
extended to justify disparate treatment of interstate wholesale
ratepayers. First, the passage is conditioned on the absence of
“retail choice,” which indicates that the recognition of a state
commission’s authority pertains to disparities in retail, not
wholesale, rates. The cited passage from Order No. 2000
appears to stand for the proposition that, for example, NCUC
may require Duke to sell its lowest cost power to retail native-
load customers in North Carolina. But that proposition is
uncontested: Orangeburg protests NCUC’s control over
wholesale native-load customers, not the state commission’s
imposition of requirements for retail native-load customers.


2
  “Generally, [regional transmission organizations] are voluntary
associations of transmission facilities that administer energy markets
and file tariffs for a group of utilities under section 205 [of the
Federal Power Act].” FirstEnergy Serv. Co. v. FERC, 758 F.3d 346,
349 (D.C. Cir. 2014).
                               26
       Second, FERC’s proffered interpretation of Order No.
2000 would be in tension with another order: Order No. 888.
See Promoting Wholesale Competition Through Open Access
Non-Discriminatory Transmission Services by Public Utilities,
Order No. 888, 61 Fed. Reg. 21,540 (May 10, 1996)
(hereinafter, “Order No. 888”). Importantly, Order No. 888
served as the foundation for Order No. 2000. Transmission
Access Policy Study Grp. v. FERC, 225 F.3d 667, 681 (D.C.
Cir. 2000) (per curiam). Prior to Order No. 888, some
wholesale customers were stuck with a single utility capable of
serving them, which “produced an implicit obligation by the
utilities to continue satisfying their customers’ power needs, as
well as a reciprocal expectation by customers of continued
service.” Id. at 699-700. In other words, the utility serving
wholesale customers without a choice of suppliers was under a
regulatory obligation to treat those customers as “native load.”
See 18 C.F.R. § 33.3(d)(4)(i) (defining “native load
commitments” as including “commitments to serve wholesale
. . . power customers on whose behalf the potential supplier, by
. . . regulatory requirement . . . has undertaken an obligation to
construct and operate its system to meet their reliable
electricity needs”). But in Order No. 888, the Commission
upended that regime, announcing that it was “not appropriate”
to impose on a utility a “regulatory obligation” to treat a
wholesale customer as part of the utility’s native load. Order
No. 888, 61 Fed. Reg. at 21,638 (“[I]t is not appropriate to
impose on a wholesale requirements supplier a regulatory
obligation to continue to serve its existing requirements
customer beyond the end of the contract term.”); see also
Transmission Access Policy Study Grp., 225 F.3d at 700
(“Order 888 fundamentally undermines utilities’ expectation of
continued service and cost recovery.”).

    FERC’s interpretation of Order No. 2000 here is in tension
with that ruling. Although Order No. 888 bars “regulatory
                               27
obligations” requiring utilities to treat wholesale customers as
native load, the Commission’s interpretation of Order No. 2000
authorizes NCUC to require Duke to serve the “lowest cost
power” to native-load wholesale customers. The two orders
are not necessarily irreconcilable, but the tension requires
further explication from FERC.

      Third, FERC’s interpretation of Order No. 2000 suggests
that NCUC has the authority to regulate interstate wholesale
power sales, but that would plainly intrude upon FERC’s
exclusive jurisdiction. See New England Power, 455 U.S. at
340. The record contains at least one example of disparate
treatment involving interstate sales of wholesale power: North
Carolina-based Duke agreed to treat Greenwood, South
Carolina as a native-load customer, and NCUC approved.
According to FERC’s reasoning, the fact that Order No. 2000
authorizes NCUC, a state commission, to “require a utility to
sell its lowest cost power to native load” justifies the disparate
treatment by North Carolina-based Duke of two South Carolina
wholesale ratepayers, Greenwood and Orangeburg. See JDA
Approval Order, 139 FERC at 62,327 (internal quotation marks
omitted), J.A. 133-34. But FERC – not state commissions –
has “exclusive authority to regulate the transmission and sale
at wholesale of electric energy in interstate commerce.” New
England Power, 455 U.S. at 340; see also Elec. Power Supply
Ass’n, 136 S. Ct. at 766 (holding that FERC has jurisdiction
over “rules or practices that directly affect the wholesale rate”
(emphasis, internal quotation marks, and alterations omitted)).
Therefore, insofar as the Commission attempts to justify
disparate treatment of interstate wholesale customers by
invoking a state commission’s authority, FERC’s interpretation
of Order No. 2000 is unsound.

    In sum, it is not clear how FERC can stretch the cited
passage from Order No. 2000 to cover disparate treatment of
                               28
interstate wholesale ratepayers, like Greenwood and
Orangeburg. That is not to say there is no possible explanation
for FERC’s approval of the JDA. But the Commission
brandishes Order No. 2000 as though it speaks for itself, plainly
and self-evidently justifying the JDA’s disparate treatment of
wholesale ratepayers. For the reasons explained above, such
an unadorned explanation does not suffice. Without more, the
Commission’s approval of the JDA’s challenged provisions
were either legally unsound or unresponsive. Because “FERC
[has not] offer[ed] a valid reason for the disparity,” we cannot
affirm its approval of the JDA provisions that establish
disparate treatment of native-load and non-native-load
wholesale customers, and incorporates NCUC’s potentially
unlawful regulatory regime. See Black Oak Energy, 725 F.3d
at 239. Therefore, we conclude that FERC acted arbitrarily and
capriciously by failing to “articulate a satisfactory explanation
for its action.” State Farm Mut. Auto. Ins. Co., 463 U.S. at 43.
We grant the petition for review and vacate the portions of the
JDA Approval Order and Rehearing Order that accept disparate
rates for native-load and non-native-load wholesale customers.

                              ***

     For the foregoing reasons, we vacate in part the JDA
Approval Order and the Rehearing Order, and remand the
matter to FERC for further explanation regarding its approval
of the JDA.

                                                    So ordered.
