United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued October 17, 2019                Decided March 27, 2020

                         No. 18-1298

         BALTIMORE GAS AND ELECTRIC COMPANY,
                     PETITIONER

                              v.

        FEDERAL ENERGY REGULATORY COMMISSION,
                     RESPONDENT

 MARYLAND OFFICE OF PEOPLE’S COUNSEL AND MARYLAND
      PUBLIC SERVICE COMMISSION, INTERVENORS


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


     Matthew E. Price argued the cause and filed the briefs for
petitioner.

     Jared B. Fish, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With him on the
brief were James P. Danly, General Counsel, and Robert H.
Solomon, Solicitor.

    Stephen C. Pearson argued the cause for intervenors. With
him on the brief were Miles H. Mitchell, Ransom E. Davis,
                               2

Paula M. Carmody, William F. Fields, Joseph G. Cleaver, and
Scott H. Strauss.

   Before: HENDERSON and RAO, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.

   Opinion for the Court filed by Senior Circuit Judge
WILLIAMS with respect to Parts I, II, and IV.

    Opinion for the Court filed by Circuit Judge RAO with
respect to Part III.

   Dissenting Opinion filed by Senior Circuit Judge
WILLIAMS with respect to Part III.

     WILLIAMS, Senior Circuit Judge: This case arises out of
the Federal Energy Regulatory Commission’s effort to apply its
“matching” principles to divergences between the timing of
deductions for tax purposes and timing for purposes of
allocating costs to ratepayers. While Congress and other bodies
imposing taxes may want to allow early depreciation of an asset
(to encourage investment), for example, the Commission wants
a cost (less offsetting tax benefits) to be charged in the period
over which the resulting asset provides services to the utility’s
customers.

                               I.

     In December 2016, Baltimore Gas and Electric Company
(“BGE”) filed a new rate proposal with the Commission under
§ 205 of the Federal Power Act, 16 U.S.C. § 824d. The
proposal sought a net recovery of approximately $38 million
from future ratepayers relating to various costs incurred by
BGE dating back to 2005. It is undisputed that consumers had
not been charged for these costs between 2005 and the 2016
filing.
                                3


     The relevant items are in fact a good deal more
complicated than the accelerated depreciation example used
above, but their details do not affect the issues before us. They
arise from (1) a transition problem posed by a switch in
Commission handling of such matters, (2) a change in tax rates,
and (3) differences between ratemaking and tax treatments of
the equity component of construction costs. The sums involved
in the first and third categories totaled about $42 million, offset
by about $4 million in the second (which BGE proposed to
return to the ratepayers). FERC expects utilities to track these
amounts according to Financial Accounting Standard 109
(“FAS 109”), a financial accounting and reporting standard
promulgated by the not-for-profit Financial Accounting
Standards Bureau intended to set forth recording requirements
to facilitate “tax normalization,” i.e., resolution of timing
differences exemplified by the matters discussed above. See
FERC Br. 12; Accounting for Income Taxes, FERC Docket No.
AI93-5-000 (Apr. 23, 1993) (“1993 Guidance”).

     FERC denied BGE’s request to recover these amounts,
declining to find BGE’s proposed rate “just and reasonable,” as
required by § 205(a). Specifically, it found BGE’s request in
violation of the procedural requirements that it had developed
for implementation of the matching principle in this context and
had stated in its order, Regulations Implementing Tax
Normalization for Certain Items Reflecting Timing Differences
in the Recognition of Expenses or Revenues for Ratemaking
and Income Tax Purposes, Order No. 144, FERC Stats. & Regs.
¶ 30,254 (1981). Order No. 144 requires that any such
adjustment “be made in the applicant’s next rate case following
applicability of the rule.”

31,519. It also requires
applicants “to begin the process of making up deficiencies in or
eliminating excesses in their deferred tax reserves so that,
within a reasonable period of time to be determined on a case-
                                4

by-case basis, they will be operating under a full normalization
policy.”
 

31,560.

     FERC concluded that BGE had breached the requirements
of Order No. 144 by failing to file for recovery of these amounts
in its “next rate case,” which, according to FERC, was BGE’s
2005 rate filing. Order Rejecting Proposed Tariff Revisions,
PJM Interconnection, LLC, 161 FERC ¶ 61,163 (2017)
(“Order”). On requests for clarification and rehearing, the
Commission made clear its position that the “reasonable period
of time” requirement of Order No. 144 “was intended to work
in conjunction with the ‘next rate case’ requirement,” so that it
does not “negate the requirement that applicants must seek
recovery in their next rate case.” Order on Rehearing and
Clarification, PJM Interconnection, LLC, 164 FERC ¶ 61,173,
at P 18 (2018) (“Rehearing Order”).

     Although neither party speaks directly to the issue, we take
it that, for purposes of this case anyway, the “next rate case
following applicability of the rule” is the “next rate case” after
the utility has incurred an item (including either a cost or a
benefit) requiring “normalization” under Order No. 144 and the
1993 Guidance, not counting periods in which a rate case or
settlement had itself normalized the treatment of the item (or
adequately addressed its normalization). Indeed, even though
FERC denied recovery of such amounts for years past, its
denial was without prejudice to BGE’s recovery of FAS 109
amounts properly allocable to future years, leaving open BGE’s
opportunity to achieve normalization prospectively. See
Rehearing Order at PP 37–38; see also FERC Br. 15.

    BGE petitioned for review and claims that FERC’s
application of Order No. 144 was arbitrary and capricious
under the Administrative Procedure Act, 5 U.S.C. § 706(2)(A),
misapplying the “next rate case” and “reasonable period of
time” requirements. BGE also asserts that FERC erred in
                               5

failing to recognize BGE’s 2006 settlement of the 2005 rate
case as an example of the sort of settlement briefly discussed in
Order No. 144. That order had said that it left “undisturbed the
ability of the parties to reach a settlement on any of the issues
covered by the rule.” Order No. 144 at ¶ 31,519. BGE argues
the settlement qualified under Order No. 144 and as a result
preserved BGE’s ability to recover the FAS 109 amounts here
at issue.

     For the reasons developed below we find that FERC’s
orders were not arbitrary and capricious and therefore deny the
petition for review.

                               II.

     We begin with the 2006 settlement agreement, which BGE
claims preserved its right to recover FAS 109 amounts dating
back to 2005. As BGE acknowledges, BGE Br. 32 n.5, we have
long applied Chevron deference to FERC’s reasonable
interpretations of settlement agreements it approves, Nat’l Fuel
Gas Supply Corp. v. FERC, 
811 F.2d 1563
, 1569 (D.C. Cir.
1987), and we do so here. The question before us is whether
FERC’s determination that BGE’s settlement agreement did
not preserve FAS 109 amounts for recovery in a later rate case
filing is “reasonable and reasonably explained,” Nw. Corp. v.
FERC, 
884 F.3d 1176
, 1179 (D.C. Cir. 2018), which we answer
in the affirmative. BGE’s arguments that FERC is wrong in its
application of Order No. 144’s settlement provision are not
convincing.

     The rate filing by BGE that led to the 2006 settlement
expressly excluded the FAS 109 amounts, and line items in a
spreadsheet attached to the ultimate agreement described
certain amounts as “net of” or “less” FAS 109 amounts. BGE
claims that the spreadsheets and contemporaneous testimony
explaining the same indicate that the parties intended these
                               6

amounts to be recoverable at a later date. BGE Br. 45; BGE
Add. 34. But the Commission observed that the settlement “did
not expressly reserve deferred income tax issues,” but rather,
“was silent on this point.” Rehearing Order at PP 16–17. That
seems an apt characterization. A mere description of how the
parties calculated figures says nothing about an intent to agree
on later recovery of amounts not included in the calculation,
especially as such a recovery, starting after lapse of the
settlement but allowing recovery of amounts properly due over
the settlement’s time in effect, would have seriously
compromised the Commission’s matching principle. It is thus
hard to see more in the settlement references than an agreement
to disagree. And FERC’s insistence that a settlement do more
than that fits comfortably within Order No. 144’s admittedly
vague language on settlements.

      BGE suggests that because 18 C.F.R. § 35.24 “require[s]
utilities to adopt some mechanism to pass through FAS 109
amounts to customers,” the settlement agreement’s near silence
should be understood as merely leaving undisturbed a
background expectation that FAS 109 amounts will eventually
be recovered. BGE Br. 49 (emphasis in original). But while the
heading of § 35.24(b)(1) reads, “Tax normalization required,”
and the text goes on to specify details for fulfillment of the
requirement, understanding normalization as a requirement is
entirely consistent with Order No. 144’s imposing conditions
on utilities’ recovery of deferred tax amounts and with the
Commission’s reading the Order’s language on settlements as
requiring more than the opaque treatment applied in the 2006
settlement. Indeed, as the Commission requires normalization
in order to fulfill the matching principle, it would seem to
contradict itself if it allowed the 2006 settlement’s language to
allow indefinite postponement of a utility’s recovery of FAS
109 amounts. FERC reasonably interpreted its regulations and
the settlement agreement to mean that BGE simply failed to
                               7

comply with 18 C.F.R. § 35.24 by its next rate case, as required
by Order No. 144.

     BGE also introduces information about its rates before
2005, pointing to settlements reached in 1996 and 1997, and
conjures a new argument out of the settlements. These were
“black box” settlements, meaning that they stated rates without
linking the dollar amounts to specific inputs. BGE argues that
these should be “presumed,” BGE Br. 16–17, 24, 33, to have
addressed the FAS 109 amounts, and that therefore they
fulfilled Order No. 144’s “next rate case” requirement. The
Commission responds, accurately, that BGE never made such
an argument in its petition for rehearing, and that accordingly
it’s not properly before us. See 16 U.S.C. § 825l(b). We
therefore do not address it. We confess ourselves unclear as to
just how recovery of FAS 109 amounts in 1996–2005
(assuming it occurred), followed by a gap from 2005 to the
effective date of BGE’s 2016 filing, could satisfy the matching
principle as to amounts properly allocable to that period.

                              III.

    Finally, BGE argues that, notwithstanding the
requirements of Order No. 144, FERC has been more
permissive with four “similarly situated” utilities and fails to
explain its disparate treatment of BGE’s filing. BGE Br. 38–
42; BGE Reply Br. 15–21.

     On arbitrary and capricious review, FERC bears the
burden “to provide some reasonable justification for any
adverse treatment relative to similarly situated competitors.”
ANR Storage Co. v. FERC, 
904 F.3d 1020
, 1025 (D.C. Cir.
2018). To determine whether an agency must justify a prior
contrary decision, therefore, we ask whether the regulated
parties at issue are “similarly situated.” See, e.g., W. Deptford
Energy, LLC v. FERC, 
766 F.3d 10
, 20 (D.C. Cir. 2014) (“It is
                                  8

textbook administrative law that an agency must provide[]
a reasoned explanation for departing from precedent or treating
similar situations differently, and Commission cases are no
exception.”) (citations and quotation marks omitted) (emphasis
added); LeMoyne-Owen College v. NLRB, 
357 F.3d 55
, 60–61
(D.C. Cir. 2004) (Roberts, J.) (“An agency is by no means
required to distinguish every precedent cited to it by an
aggrieved party. But where, as here, a party makes a significant
showing that analogous cases have been decided differently,
the agency must do more than simply ignore that argument.”)
(citations omitted) (emphasis added).

     Here, BGE has made a threshold showing that it is
similarly situated to four utilities that received more favorable
treatment by the Commission. FERC responds that these four
prior actions are not binding precedent because three of them
were issued by staff exercising subdelegated authority and none
of the four “squarely presented” or “necessarily resolved” the
issues presented in this case.1 FERC Br. 44–48. The agency
argues in the alternative that it did reasonably distinguish

1
  In Midcontinent Independent System Operator, Inc., 153 FERC
¶ 61,374 (2015), the only order of the four issued directly by the
Commission, the utility received approval to recover FAS 109
amounts arising from a 2011 change in tax rates. FERC approved the
other three rate filings in letter orders issued by agency staff. PPL
Electric Utilities Corp., Letter Order, FERC Docket No. ER12-1397
(May 23, 2012), and Duquesne Light Co., Letter Order, FERC
Docket No. ER13-1220 (Apr. 26, 2013), sought recovery of
unfunded FAS 109 amounts related to the Pennsylvania Public
Utility Commission’s decision to pass on certain income tax savings
to customers. Virginia Electric & Power Co. (VEPCO), Letter Order,
FERC Docket No. ER16-2116-000 (Aug. 2, 2016), sought FAS 109
amounts related to the equity component of construction costs and
a recent tax law change. Each letter order purports to constitute final
agency action on the part of the Commission. See, e.g.,
 id. at 2 
(“This
order constitutes final agency action.”).
                                 9

BGE’s submission from those in the four prior orders. FERC
Br. 49–52. We take each of the Commission’s arguments in
turn.

                                 A.

     First, FERC argues that three of the four prior orders cited
by BGE need not be distinguished because they were issued by
agency staff under authority subdelegated by the Commission.
The agency’s regulations delegate to certain staff the authority
to “[r]eject” or “[a]ccept for filing all uncontested tariffs or rate
schedules” if the filings “comply with all applicable statutory
requirements, and with all applicable Commission rules,
regulations and orders.” 18 C.F.R. § 375.307(a)(1)(i)–(ii).2

     Setting aside the permissibility of FERC’s subdelegation,
which is not a question before us, the Commission cannot lend
its authority to staff and then disclaim responsibility for the
actions they take. Delegated staff actions are actions of the
agency. See 5 U.S.C. § 551(13) (“‘[A]gency action’ includes
the whole or a part of an agency rule, order, license, sanction,
relief, or the equivalent or denial thereof.”);
 id. § 551(6)
(“‘[O]rder’ means the whole or a part of a final disposition …
other than rule making.”); Sprint Nextel Corp. v. FCC, 
508 F.3d
1129
, 1131 n.3 (D.C. Cir. 2007) (“‘Agency action’
encompasses any reviewable action that an agency might
take.”). Neither the APA nor our precedents distinguish
between binding orders signed by staff and those signed by the
Commission for purposes of arbitrary and capricious review.
Because staff exercise only authority delegated to them by the

2
  Under the Federal Power Act, proposed rates go into effect by
operation of law sixty days after filing with the Commission, barring
further action by the agency. See 16 U.S.C. § 824d(d). When filings
are “rejected,” the Commission treats them as never filed, meaning
they cannot lawfully go into effect. See 18 C.F.R. § 385.2001(b)(2).
                                  10

Commission, their decisions to accept, reject, or take other
actions on filings are decisions of the Commission until
superseded by subsequent agency action. 18 C.F.R.
§ 385.1902(a) (“Any staff action … taken pursuant to authority
delegated to the staff by the Commission is a final agency
action that is subject to a request for rehearing.”);3 see also Pub.
Citizen, Inc. v. FERC, 
839 F.3d 1165
, 1169 (D.C. Cir. 2016)
(“[W]e have previously defined ‘order’ expansively to include
any agency action capable of review on the basis of the
administrative record.”) (citation and quotation marks omitted).
     FERC must exercise its statutory authority in accordance
with the APA, and its decision to delegate to staff cannot erase
the requirements of reasoned decisionmaking. Procedural
differences between this case, in which the Commission
rejected BGE’s filing, and cases decided by staff letter orders
are insufficient standing alone to justify disparate treatment of
similarly situated utilities. It is not enough for FERC to say,
“the staff did it.” Reasoned decisionmaking requires FERC to
explain differential treatment under the same rules. See ANR
Storage, 904 F.3d at 1024 
(citing W. 
Deptford, 766 F.3d at 20
).

                                  B.

    Second, FERC maintains that the four prior orders need not
be distinguished because none “squarely presented” or
“necessarily resolved” the issue in this case. Specifically, the

3
   Whether those actions would be reviewable without further
exhaustion of administrative remedies is, of course, a different
question. See 16 U.S.C. § 825l(b) (“No objection to the order of the
Commission shall be considered by the court unless … urged before
the Commission in the application for rehearing unless there is
reasonable ground for failure so to do.”). In this case, BGE raised its
arbitrary and capricious argument based on these four prior orders in
its request for rehearing before the Commission.
                               11

Commission notes the three staff letter orders cited by BGE
were uncontested and that none of the four provided a reasoned
analysis on the collection of accrued FAS 109 amounts.

     These arguments ring hollow because we rejected them in
substantially similar form only two years ago. In ANR Storage
Co. v. FERC, we held in no uncertain terms that distinguishing
prior orders in similar cases simply as “unreasoned” or
“unopposed” fails to satisfy the APA’s reasoned
decisionmaking 
requirement. 904 F.3d at 1025
. As our decision
emphasized, the duty to explain inconsistent treatment is
incumbent on the agency and cannot be waived by the decisions
of third parties. See
 id. (“[N]either of 
those parties could
contract away FERC’s statutory duty—imposed by the APA
and owed to all other regulated parties—to provide some
reasonable justification for any adverse treatment relative to
similarly situated competitors.”).

     The Commission’s attempt to evade this holding pulls
from dicta in San Diego Gas & Electric Co. v. FERC, in which
we approved the agency’s rejection of an incentive award
despite the granting of the award in prior cases. 
913 F.3d 127
(D.C. Cir. 2019). We held that approval of the incentive was
not required by prior orders because earlier decisions “[did] not
amount to policy or precedent.”
 Id. at 142 
(citation and
quotation marks omitted). For this principle, San Diego Gas
cited an earlier decision in which we required FERC to explain
inconsistencies, even though we ultimately concluded such
inconsistencies had been adequately explained.
 Id. (citing Gas
Transmission Nw. Corp. v. FERC, 
504 F.3d 1318
, 1320 (D.C.
Cir. 2007)). Applying longstanding principles of arbitrary and
capricious review, San Diego Gas maintained the requirement
that agencies must reasonably explain disparate treatment of
similarly situated parties. Contrary to the view of our dissenting
colleague, San Diego Gas did not, and could not have, altered
settled law.
                               12


     Our standards for arbitrary and capricious review
distinguish between an agency’s burden of explanation when
announcing new rules and when applying existing rules in
individual cases. When an agency seeks to change policy, we
assess its actions under the rigorous standards of FCC v. Fox
Television Stations, Inc., by requiring the agency to “display
awareness that it is changing position,” show “the new policy
is permissible under the statute,” and “show that there are good
reasons for the new policy.” 
556 U.S. 502
, 515–16 (2009). By
contrast, an agency applying existing policy must explain how
an outcome coheres with previous decisions. We require
agencies to justify different results reached under the same rule
in order to lend predictability and intelligibility to the
announced standard, promote fair treatment, and facilitate
judicial review. See 
LeMoyne, 357 F.3d at 61
. If a party
plausibly alleges that it has received inconsistent treatment
under the same rule or standard, we must consider whether the
agency has offered a reasonable and coherent explanation for
the seemingly inconsistent results. See Point Park Univ. v.
NLRB, 
457 F.3d 42
, 50 (D.C. Cir. 2006) (“Without a clear
presentation of the [agency’s] reasoning, it is not possible for
us to perform our assigned reviewing function and to discern
the path taken by the [agency] in reaching its decision.”).

     In the view of our dissenting colleague, an agency need not
explain disparate outcomes under the same rule unless parties
opposed the agency’s administration of the rule in the prior
cases. Dissenting Op. at 2. Thus, the dissent frames our
decision as fashioning a new requirement for agency action.
 Id.
at 7. 
But it cannot be argued “the great principle that like cases
must receive like treatment” is anything but black letter
administrative law. NLRB v. Gen. Stencils, Inc., 
438 F.2d 894
,
905 (2d Cir. 1971) (Friendly, J.).
                                13

     The APA’s requirement of reasonableness incorporates
basic principles of fair notice and equal treatment inherent to
the rule of law. Regulated parties are entitled to know what an
agency’s rules require and to assume that administration of the
rules will be reasonably predictable and coherent across cases.
FERC cannot avoid its obligation to provide a reasoned
explanation for contrary treatment of “similarly situated”
parties solely because those decisions were uncontested or
unreasoned. See ANR 
Storage, 904 F.3d at 1025
.

                                C.

     Under our standards for reasoned decisionmaking, FERC
fares far better on its final argument: that it in fact provided an
adequate explanation to distinguish this case from prior
decisions. The Commission reasonably determined BGE
waited far longer than the other four utilities to collect
accumulated FAS 109 amounts and failed to offer an adequate
reason for the delay. See Rehearing Order at P 28 (noting PPL
and Duquesne involved delays of four and seven years,
respectively, compared to BGE’s twelve). Moreover, FERC
offered specific ways in which each of the four prior cases
differed from BGE’s filings in at least one key respect. See
 id.
at P 
28 n.86 (distinguishing BGE from PPL, Duquesne, and
VEPCO based on the type of makeup provisions sought and on
specific accounting matters), P 30 (noting Midcontinent and
VEPCO sought collection on deficiencies going forward rather
than accumulated amounts). Because FERC detailed these
differences in the administrative orders rejecting BGE’s filing,
we conclude the Commission met its burden to reasonably
explain the decision. This is enough to survive arbitrary and
capricious review.
                              14



                             IV.

    FERC’s rejection of BGE’s tariff filing is a reasonable and
reasonably explained application of Order No. 144.
Accordingly, the petition for review is

                                                       Denied.
    WILLIAMS, Senior Circuit Judge, dissenting with respect
to Part III:

     BGE argues that, notwithstanding the requirements of
Order No. 144, FERC has been more permissive with four other
“similarly situated” utilities. Pointing to four orders that it
views as reaching decisions inconsistent with FERC’s ruling
here, BGE argues that FERC’s rejection of its rate filing, and
failure (in BGE’s view) to distinguish the prior decisions,
violates the standard requirement that agency decisions be
reasoned. BGE Br. 38; BGE Reply 15–21.

    The majority agrees with BGE that the Commission was
obliged to distinguish these orders, but finds that it did so
adequately. I believe that under the circumstances the
Commission was under no obligation to distinguish the orders,
and therefore don’t reach the question of whether its efforts to
do so were good enough.

     I would hold that FERC’s duty to distinguish the orders
cited by BGE, or to articulate an intentional break with them
that would satisfy the requirements of FCC v. Fox Television
Stations, Inc., 
556 U.S. 502
, 515–16 (2009), turns on whether
the pertinent issues were “squarely presented and necessarily
resolved by the agency” in those past cases, as we held in San
Diego Gas & Electric Company v. FERC, 
913 F.3d 127
, 142
(D.C. Cir. 2019). That standard is met if but only if the
Commission’s seeming resolution of the issue has been clearly
opposed (typically by a party opposing the agency’s decision
though in some cases staff opposition would likely suffice). As
far as we know, no such opposition was presented in the
generation of the four orders at issue here.1

    1
     I am uncertain whether it should make any difference
whether the agency action was by staff or by the Commissioners
themselves. Cf. Maj. Op. 9–10. Under my view it would make no
                                  2

     This approach, established in our case law, ensures that
any comparisons between new and old cases rest on a clash
between an agency rejection of clearly asserted propositions of
fact, law or policy, and is analogous to how, in federal courts,
“[q]uestions which merely lurk in the record, neither brought to
the attention of the court nor ruled upon, are not to be
considered as having been so decided as to constitute
precedents,” Cooper Industries, Inc. v. Aviall Services, Inc.,
543 U.S. 157
, 170 (2004) (quoting Webster v. Fall, 
266 U.S.
507
, 510 (1925), and relied on in San Diego Gas & Electric
Co., 913 F.3d at 142
)).

      Given the number of uncontested issues that an agency
typically resolves—uncontested, we may infer, either because
any adversely affected parties got no notice or, having notice,
thought it not worth the trouble to oppose—a requirement that
an agency address its past vermicelli, either by reconciling its
current decision with the earlier record or by applying Fox
Television, would tie courts and agencies in linguistic knots for
little or no benefit to the rule of law. Indeed, the majority’s
approach invites a litigant to dive deep into the records of past
agency cases, find one with facts loosely comparable to its own
case, and then require the agency to adjudicate, ex post and
likely on a limited record, whether and to what extent each past
case is like the present one. Our precedents do not require this.



difference here, because in the four allegedly contradictory
decisions neither staff nor Commissioners confronted a claim
contrary to their disposition.

     As a general matter I agree with the majority that the
decisionmakers’ lack of reasoning in their prior ruling should not
excuse their disregard of an apparent contradiction with that ruling.
Maj. Op. 10.
                               3

     The majority rests its more sweeping view of the agency’s
duty to distinguish prior cases largely on ANR Storage Co. v.
FERC, 
904 F.3d 1020 
(D.C. Cir. 2018). But our decision there
appears to have been driven overwhelmingly by the incongruity
between the Commission’s denying ANR Storage marketing
flexibility after having granted the same flexibility to two
subsidiaries of DTE Energy that were direct competitors of
ANR Storage. As measured by FERC’s own criterion for
granting flexibility—absence of market power in the relevant
market—ANR and DTE were nearly identical twins: ANR’s
market share was substantially the same as 
DTE’s. 904 F.3d at
1025
. As we said, “[B]y FERC’s own reckoning, ANR and
DTE appear virtually indistinguishable with respect to their
current market power.”
 Id. at 1024–25.
     Thus, our primary theme in ANR Storage was FERC’s
wholly unexplained divergence in its treatment of two virtually
identical competitors. See
 id. at 1024 
(“DTE was then a strong,
established competitor, just as ANR is today.”);
 id. at 1025
(referring to “FERC’s statutory duty—imposed by the APA
and owed to all other regulated parties—to provide some
reasonable justification for any adverse treatment relative to
similarly situated competitors” (emphasis added));
 id. at 1026
(“ANR and DTE seem indistinguishable as leading competitors
with virtually identical shares in the same relevant markets.”).
In ANR Storage, FERC had offered an astonishing argument (a
promising candidate for a chutzpah award) that ANR’s “market
power posed a greater concern because [its] largest
competitor—DTE—already was charging market rates,” to
which we replied, “We frankly doubt that FERC may pick
winners and losers in this way, based on which of two
otherwise indistinguishable competitors happens to win a race
to the FERC equivalent of a courthouse.”
 Id. at 1025–26
(emphasis added).
                               4

     ANR Storage’s insistence that the Commission confront its
different treatment of two competing utilities is, incidentally,
boosted by our precedent treating such disparate treatment as a
freestanding violation of the FPA’s ban on discriminatory rates
where two utilities are in competition. In Dynergy Midwest
Generation, Inc. v. FERC, 
633 F.3d 1122
, 1125, 1127 (D.C.
Cir. 2011), we vacated a FERC order approving a regional
transmission organization’s method of compensating
competing generators for their provision of certain specialized
power. The case is distinct from ANR Storage in that the
competing public utilities were selling the special power to yet
another FERC-regulated utility, the regional transmission
organization.
 Id. at 1124. 
But what unifies the cases is they
arise from the technologically induced development of
competition between power generators subject to regulation
under the terms of the FPA—which had been passed in a quite
different era, when generators subject to its terms could
generally be expected to wield monopoly power. Unlike in
ANR Storage, there is no suggestion here that any of the firms
said to have been treated more favorably than BGE was in any
way its competitor.

     Besides reversing FERC because of its utterly inconsistent
treatment of competitors, ANR Storage used language
potentially applicable to non-competitive situations. We said,
for example, “In particular, [an agency] decision must give a
‘reasoned analysis’ to justify the disparate treatment of
regulated parties that seem similarly situated, W. Deptford
Energy, LLC v. FERC, 
766 F.3d 10
, 21 (D.C. Cir. 2014).” ANR
Storage, 904 F.3d at 1024
. The majority accordingly treats the
case as applying that precept even in a case where no one
opposed the agency ruling in the prior “precedents.” Some
language of the decision may point that way, but in partial
response to a Commission argument that the application for
flexibility by one of DTE’s two subsidies had been unopposed,
we noted that the other subsidiary’s application “was opposed,”
                               
5

904 F.3d at 1025 
(emphasis in original). So ANR Storage
hardly represents adoption of the majority’s demanding rule.

      Nor do the other cases cited by the majority support its
position. West Deptford Energy involved a Commission’s
switcheroo on whether a generator joining a regional
transmission organization should be governed by the tariff in
effect at the time it applied to join or at the time it actually
joined. Four times the Commission had confronted filings by
a regional transmission organization proposing the former rule,
and four times the Commission had insisted on the latter. 
See
766 F.3d at 19
–21. We thought that “the Commission failed,
at multiple steps, to provide any reasoned explanation of how
its [latest] decision conformed to the Federal Power Act and
prior precedent,”
 id. at 2
4, and we therefore required an
explanation. West Deptford Energy is thus wholly different
from the sort of case, like the instant one, in which the
Commission’s past treatment of the issue now relevant was
uncontested by anyone before the agency.

     Similarly, in LeMoyne-Owen College v. NLRB, 
357 F.3d
55 
(D.C. Cir. 2004) (Roberts, J.), the College contested the
application of the Board’s stated standard for classifying
faculty members as managerial employees. It had called the
Regional Director’s attention to distinctions between its
situations and the cases on which he had relied, as well as to
favorable cases that he had ignored—all cases in which the
conflict had been clearly posed. Its claim having been brushed
off by the Regional Director, the College raised the point before
the Board, which dismissed the matter, “declaring in a one-
sentence order that the College had ‘raised no substantial issues
warranting review.’”
 Id. at 60. 
We thought differently and
reversed. NLRB v. General Stencils, Inc., 
438 F.2d 894 
(2d Cir.
1971), see Maj. Op. 12–13, is also a standard example of an
agency’s failing to explain the relationship between the
                               6

decision being reviewed and prior contested decisions resting
on an apparently inconsistent theory.

     The majority cites Point Park University v. NLRB, 
457
F.3d 42
, 50 (D.C. Cir. 2006), for the proposition that an agency
must explain its reasoning so we can “perform our assigned
reviewing function.” Maj. Op. 12. While that’s of course true,
the opinion’s concern was with the NLRB’s complete failure to
present reasoning clear enough to enable the court to discern
“the path 
taken.” 457 F.3d at 50
. Very specifically, the Board
had failed to meet our insistence in LeMoyne-Owen that it
explain “which factors are significant and which less so, and
why.”
 Id. (quoting LeMoyne-Owen). 
See also NLRB v. Yeshiva
University, 
444 U.S. 672 
(1980). The case in no way fits the
majority’s idea that an agency must reconcile a decision under
review with all prior rulings, even if never contested.

     Finally, in San Diego Gas & Electric Company v. FERC
(mysteriously dismissed as “dicta” by the majority, see Maj.
Op. 11), the court acknowledged that FERC had treated like
parties differently; FERC denied San Diego Gas recovery of
costs incurred before the agency issued an order granting
recovery of those costs, whereas FERC had granted similar pre-
order costs for other utilities. 
913 F.3d 127
, 142. We found
this apparent inconsistency no cause for reversal. “We have
previously held that, ‘[i]n the absence of protests,’ the
Commission’s decision to approve rate increases does not
amount to ‘policy or precedent.’”
 Id. (emphasis added) 
(citing
Gas Transmission Nw. Corp. v. FERC, 
504 F.3d 1318
, 1320
(D.C. Cir. 2007)). Accordingly, we required no explanation of
the difference.

    In my view, the majority breaks from our sensible and
well-reasoned precedents, and I therefore respectfully dissent.