Full opinion text
ORDER AND AMENDED OPINION BERZON, Circuit Judge: ORDER The opinion filed on December 17, 2008, and published at 550 F.3d 846, is hereby amended as follows: 1. Slip Op. 16570, line 31: Replace <Eaeh of these justification> with <Each of these justifications > 2. Slip Op. 16571, line 4: Remove the sentences <This explanation is undercut, first of all, by the fact that the subsidized rates are supplied to just three firms, all of which use electric power for the same industrial purpose — smelting aluminum. Thus, the payments do not encourage “diversified” use of electric power, but targeted use.> 3. Slip Op. 16571, line 9: Replace < Moreover, because > with 4. Slip Op. 16571, lines 15-16: Join the paragraph that begins < Common sense suggests ... > to the preceding paragraph, which ends < ... with BPA powers 5. Slip Op. page 16572, line 17: Replace the sentence <But the exchange program is a specific exception that proves a general rule — and the rule is that Congress intended BPA to operate as a business selling power for profit, not as a charitable institution distributing “benefits.” See, e.g., Ass’n of Pub. Agency Customers, 126 F.3d at 1171 (citing BPA’s “mandate to operate with a business-oriented philosophy”).> with <But the exchange program is a specific exception that proves a general rule — and the rule is that Congress intended BPA “to operate with a business-oriented philosophy:” See, e.g., Ass’n of Pub. Agency Customers, 126 F.3d at 1171. > 6. Slip Op. page 16574, line 22: Replace 832a(f) of the NWPA> with 832a(f) of the Bonneville Project Act> 7. Slip Op. page 16578, line 11: Replace <BPA’s petition > with <Alcoa’s petition > 8. Slip Op. page 16578, line 12: Replace <BPA’s primary argument> with <Aleoa’s primary argument> With these amendments, the panel has unanimously voted to deny the Bonneville Power Administration’s Petition for Panel Rehearing and Port Townsend Paper Corporation’s Petition for Panel Rehearing. The petitions for panel rehearing are DENIED. No further petitions for rehearing or rehearing en banc may be filed. OPINION A. Introduction At their origins during the New Deal, the Bonneville Project’s hydroelectric operations in the Pacific Northwest, administered by the Bonneville Power Administration (“BPA”), were promoted as spreading the benefits of affordable federal power widely, to “the farmer and the factory, and all of you and me.” At the same time, the Project gave a vital boost to the aluminum industry of the Pacific Northwest. Indeed, in the early days of the Project, what was good for BPA was good for the aluminum industry, and what was good for the aluminum industry was good for BPA. Aluminum manufacturers received low-cost federal hydroelectric power to operate energy-intensive smelting operations in the Pacific Northwest, and BPA gained a reliable market for a supply of electric power that otherwise greatly exceeded demand in a region where rural electrification was still a work in progress. See H.R.Rep. No. 96-976, pt. 2, at 27 (1980), as reprinted in 1980 U.S.C.C.A.N. 6023. BPA’s synergistic relations with the aluminum industry during this early period were widely seen as a public good. The aluminum manufacturers and the region’s nascent aviation industry, which they supplied, not only brought many high-wage jobs to the Pacific Northwest, but also served as a vital strategic asset for the United States during World War II and the Cold War decades that followed. Times have changed. Public utilities and electrical cooperatives serve a larger regional population with greater needs for electrical power, see id., to which they are statutorily guaranteed preferential access. See 16 U.S.C. § 832c(a). Rising energy prices have made the relatively inexpensive federal power generated by BPA more attractive than ever, not only to BPA’s regional “ ‘preference’ customers,” Aluminum Co. of America v. Central Lincoln Peoples’ Util. Dist. (“Alcoa”), 467 U.S. 380, 384, 104 S.Ct. 2472, 81 L.Ed.2d 301 (1984), but also to utilities outside the Pacific Northwest. At the same time, due to a variety of factors — among them higher energy costs — the region’s aluminum industry has fallen on hard times. The smelting operations of the major aluminum manufacturers, which traditionally ran on electric power purchased directly from BPA, are generally being operated at reduced capacity, and in some cases, have shut down entirely. This ease centers on how much BPA can or must do, under the authority and mandate conferred upon it by Congress, to aid its longtime, but now ailing, customers. The assistance largely at issue here consists of three three-party contracts BPA executed in June 2006, each with a local public utility company and one of the aluminum companies that are “direct service industrial” customers (“DSIs”) of BPA. In the contracts, BPA committed itself to make payments to the aluminum company DSIs (“aluminum DSIs”) totaling a maximum of $59 million per year for five years in lieu of supplying them with actual electrical power, while retaining the option to sell them physical power instead in the final two years. In addition, in September 2006, BPA arranged for the sale of physical power to Port Townsend Paper Company (“Port Townsend”), the sole existing DSI that is not an aluminum manufacturer, via a contract between BPA and a local utility company, Public Utility District Number 1 of Clallam County (“Clallam”), for the sale of physical power, which Clallam would then supply to Port Townsend. Challenges to these four contracts by aluminum DSI Alcoa; the Pacific Northwest Generating Cooperative, an organization of electrical cooperatives that are preference customers of BPA (collectively, “Cooperative”); and Industrial Customers of Northwest Utilities, an organization of firms which purchase electricity from utility companies, rather than directly from BPA (collectively, “Industrial Customers”), form the basis of the seven petitions that have been consolidated in this case. Both Port Townsend and the Public Power Council, an association of consumer-owned utilities, have intervened as interested parties. B. The Statutory Context To set out the complex statutory landscape against which we consider these challenges, we briefly review the enactments in which Congress over the past seven decades has established and regulated BPA’s authority to sell the output of the Federal Columbia River Power System, as the regional energy generation operations which began with the Bonneville Project are known. See Golden NW. Aluminum, 501 F.3d at 1041. The Bonneville Project Act of 1937 (“Project Act”), 16 U.S.C. § 832-832j, created BPA as the authority responsible for the “sale and disposition” of the electric energy generated by the federal hydroelectric projects in the Pacific Northwest. See § 832a. The Project Act directed that “in disposing of electric energy generated at [the Bonneville] project, [BPA shall at all times] give preference and priority to public bodies and cooperatives.” § 832c(a). At the same time, the Project Act also authorized BPA, subject to this preference and priority restriction, to enter into contracts for the “sale at wholesale of electric energy ... to private agencies and persons.” § 832d(a). Historically, there have been two types of private entities that purchase electric power directly from BPA: investor-owned utility companies (“IOUs”) and DSIs. See Ass’n of Pub. Agency Customers, Inc. v. BPA, 126 F.3d 1158, 1164 (9th Cir.1997). Over the following decades, Congress responded to increasing demand for BPA’s low-cost federal power within and outside the Pacific Northwest with four additional pieces of legislation relevant to this case: First, in 1964, Congress passed the Regional Preference Act, 16 U.S.C. §§ 837-837h (“RPA”), which provides that the sale of electric energy from “Federal hydroelectric plants in the Pacific Northwest” to customers outside the region must be limited to “surplus energy,” § 837a, defined as “energy ... which would otherwise be wasted because of the lack of a market therefor in the Pacific Northwest at any established rate.” § 837(c). Second, the Transmission Act, 16 U.S.C. §§ 838-838h, enacted in 1974, established the basic principles that rates for BPA power must be fixed and established (1) with a view to encouraging the widest possible diversified use of electric power at the lowest possible rates to consumers consistent with sound business principles, (2) having regard to the recovery ... of the cost of producing and transmitting such electric power, ... and (3) at levels to produce such additional revenues as may be required, in the aggregate with all other revenues of the Administrator, to pay when due [expenses related to] ... all bonds issued and outstanding pursuant to this chapter.... § 838g. Third the Northwest Power Act, 16 U.S.C. §§ 839-839h (“NWPA”), signed into law in 1980, was triggered by Congress’s recognition that demand within the Pacific Northwest for low-cost federal power threatened to outstrip supply, and that BPA’s dams were having a significant impact on the region’s fish and wildlife. See Ass’n of Pub. Agency Customers, 126 F.3d at 1165. The NWPA contains several provisions central to this litigation. Initially, the NWPA directs that “[w]henever requested,” by either a “public body and cooperative entitled to preference under the [Project Act]” or an “investor-owned utility,” BPA “shall offer to sell ... electric power to meet the [requesting entity’s] firm power load.” § 839c(b)(l). In the same section of the Act, Congress also states that BPA is “authorized to sell in accordance with this subsection electric power to existing [DSI] customers.” § 839c(d)(l)(A). The statute then instructs BPA to offer “an initial long term contract” for the sale of electric power to each of its existing DSI customers, § 839c(d)(l)(B), and, under a separate subsection, to its public utility and cooperative customers and IOUs. § 839c(g). The NWPA also authorizes BPA, in § 839c(f), to “sell, or otherwise dispose of, electric power, including power acquired pursuant to this and other Acts, that is surplus to [BPA’s] obligations incurred pursuant to subsections (b), (c), and (d) of this section[,] in accordance with this and other Acts applicable to [BPA].... ” In addition, the NWPA directs BPA to “establish, and periodically review and revise, rates for the sale and disposition of electric energy,” § 839e(a)(l), which are subject to “confirmation and approval” by the Federal Energy Regulatory Commission [ (“FERC”) ] upon a finding by the Commission that, among other things, “such rates ... are based upon [BPA]’s total system costs.” § 839e(a)(2)(B). Rates for preference customers are mandated, accordingly, to be sufficient to “recover the costs of that portion of the Federal base system resources needed to supply such loads,” § 839e(b)(l), with “Federal base system resources” defined as (A) the Federal Columbia River Power System hydroelectric projects; (B) resources acquired by [BPA] in longterm contracts ...; and (C) resources acquired by [BPA] in an amount necessary to replace reductions in capability of the resources referred to in subparagraphs (A) and (B) of this paragraph. § 839a(10). Congress also instructed that “rates applicable to direct service industrial customers shall be established,” § 839e(c)(l), at a level that is “based upon [BPA’s] applicable wholesale rates to [preference] customers and the typical margins included by such [preference] customers in their retail industrial rates [plus other considerations] ....”§ 839e(c)(2). C. The Present Litigation The events that immediately gave rise to this litigation began in June 2005, when BPA initiated the process that resulted in the execution of the contracts challenged here. On June 30, 2005, BPA issued a Record of Decision on Service to Direct Service Industrial (DSI) Customers for Fiscal Years 2007-2011 (“DSI Service ROD”), in which it announced its intention to enter into the three-way contracts with the aluminum DSIs and the local utility companies. The proposed contracts would provide “service benefits,” with the default form of delivery of the benefits being “financial payment[s]” by BPA to the DSIs. BPA retained a one-way option, however, in the fourth and fifth years of each of the contracts to discontinue a portion of the payments to a particular DSI and supply that DSI with physical power instead, although the DSI could then elect to refuse service and terminate the agreement. BPA specified that before exercising that option, the agency would conduct a “public process” to consider and explain its decision. The amount of the payments to the DSIs was determined according to a formula based on the difference between the market price of power and BPA’s standard rate for power sold to its preference customers (“PF rate”). Under the default mode, monetary payments to each DSI would be made in an amount equal to this price differential multiplied by the amount of physical power the DSI purchased from the local utility partner, thus tying the value of the benefit to the DSI’s electricity use and, therefore, to its level of operations and employment. Crucially, BPA placed three limitations on the amount of the payments it would make to the DSIs each year. First, BPA obligated itself to make the payments only on the first 560 average megawatts (“aMW”) of capacity consumed by the DSIs each year. Second, BPA capped the price differential it was willing to pay the DSIs for the power they purchased on the open market at no more than $24/ MWh. Third, BPA limited the total annual benefit the DSIs could receive to $59 million. BPA acknowledged in the DSI Service ROD that “service to the DSIs will come at the expense of higher rates paid by ... preference customers.” While BPA stated that it would “not revisit[ ] its ... decision to serve some amount of DSI load at a known and capped cost,” it also indicated — in apparent contradiction — that both the decision to contract with the DSIs and the level of service benefits that it would provide were possibly subject to change. Alcoa and the Cooperative both filed in this Court timely petitions for review of the DSI Service ROD. On May 31, 2006, BPA issued a Supplement to the DSI Service ROD (“Supplemental ROD”), which announced certain revisions in the agency’s plan to contract with the DSIs. In particular, BPA decided to provide “slightly more operating flexibility” to the aluminum DSIs by reducing the minimum level of energy usage required for eligibility to receive the monetary benefit payments. The plan’s main provisions, including the service benefit levels and the method of delivery, remained unchanged. Alcoa and the Cooperative again both filed in this Court timely petitions, this time for review of the Supplemental ROD. In June 2006, less than a month after the issuance of the Supplemental ROD, BPA executed contracts with the three aluminum DSIs — Alcoa, Columbia Falls Aluminum Co. and Golden Northwest Aluminum Holding Co. — under the terms described in the Supplemental ROD. Alcoa and the Cooperative petitioned this Court for review of those contracts as well. In the DSI Service ROD and the Supplemental ROD, BPA also announced that it would provide Port Townsend with its full requirements for power, seventeen aMW, to be supplied through Clallam. Under the final proposal, the rate for power sold by BPA to Clallam would be set at a level equal to the agency’s rate for power sold to local utilities (the PF rate) plus the margin typically charged by the latter to their industrial customers. BPA, Clallam, and Port Townsend then executed contracts providing for power service to Port Townsend through Clallam. Industrial Customers timely filed a petition for review of the contracts. D. BPA’s Rate Schedules Because a central dispute among the parties in this case concerns which of BPA’s various power rate schedules should apply to the contracts at issue, a brief overview of the possible rate categories is in order. BPA is required by its governing statutes to “establish” a number of energy rate schedules for the sale of power to different customer groups. See § 839e(a)(l). BPA calculates these rate schedules according to detailed statutory guidelines, see § 839e(a)-(h), and promulgates them through a formal ratemaking procedure that includes publication of proposed rates in the Federal Register, public hearings, and FERC approval. See § 839e(i). Four of BPA’s rate schedules are at issue in this case: the PF rate, the Industrial Firm Power (“IP”) rate, the New Resources (“NR”) rate, and the Firm Power Products and Services (“FPS”) rate. (a) PF rate The PF rate is a cost-based rate at which BPA sells firm power to its preference customers, whose requirements for firm power the agency is required to fulfill. See §§ 839c(b), 839e(b). It is calculated pursuant to guidelines specified in § 839e(b), and is BPA’s lowest published rate. For the year ending September 30, 2007, the average PF rate was $27.33/ MWh. (b) IP rate The IP rate is “applicable to [firm power sales] made to direct service industrial customers” and is “established” pursuant to the requirements of § 839e(c). Like the PF rate, it is a cost-based rate. See § 839e(c). For the year ending September 30, 2007, the average IP rate was $45.08/MWh. (c) NR rate The NR rate applies to power sales to utilities that are used by those utilities to serve “new large single load[s].” See § 839a(13); the NR rate is intended to penalize DSI customers who attempt to lower their energy costs by purchasing power at lower rates from one of the public utilities that BPA serves instead of purchasing the power directly from BPA at the IP rate. See H.R.Rep. No. 96-976, pt. 1, at 25, 51 (describing purpose of NR rate as a deterrent). For the fiscal year ending September 30, 2007, the average NR rate was $77.03/MWh. (d) FPS rate The FPS rate is perhaps the most confounding of BPA’s rate schedules, but, because all four of the contracts at issue utilize it, also the most important for this case. As it does for the PF, IP, and NR rates, BPA establishes an FPS rate schedule pursuant to the ratemaking requirements of § 839e(i), which it then publishes. See BONNEVILLE POWER ADMINISTRATION, 2007 WHOLESALE POWER RATE SCHEDULES 55-59 (November 2006) (hereinafter “Wholesale Power Rate Schedule”), available at http://www.bpa. gov/power/PFR/rates/2007-09_Power_ Rates.pdf. Unlike the other rate schedules, however, the FPS rate schedule includes a provision, entitled “Flexible Rate,” which states that energy rates “may be specified at a higher or lower average rate [than the published rate] , as mutually agreed by BPA and the Purchaser.” See id. at 57. In other words, although BPA publishes an FPS rate schedule, BPA and the contracting customer are free to deviate from this published rate by mutual agreement. See Supplemental ROD (“Power is sold under the FPS schedules at rates mutually agreed to by BPA and the purchaser.”). Thus, a sale made pursuant to the FPS rate schedule could, in theory, be made at any price. As such, the FPS rate schedule is, in effect, no rate schedule at all. II. Jurisdiction The NWPA gives this Court, as the “court of appeals for the region,” jurisdiction to hear any suit challenging “final actions and decisions taken pursuant to this chapter[of the NWPA] by [BPA]” or to “the implementation of such final actions, whether brought pursuant to this chapter, the [Project] Act, the [Regional Preference Act], or the[Transmission] Act.” § 839f(e)(5). The NWPA lists certain BPA actions as representing “final actions subject to judicial review” under the Administrative Procedure Act, 5 U.S.C. §§ 701-06. See § 839f(e)(l)(A)-(H). Among the listed actions are “sales ... of electric power under section 839c of this title.” § 839f(e)(l)(B). All four of the contracts at issue either involve sales of electric power made pursuant to BPA’s authority under § 839c or are, at least, “other final” agency actions under § 839f(e)(3), and so are reviewable by this court. Thus, we have jurisdiction to review the validity of the contracts, including (1) whether BPA is authorized and/or obligated to sell power to the DSIs under § 839c; (2) whether BPA is permitted to offer the DSIs monetary benefits in lieu of delivering physical power; (3) whether BPA may offer contract terms to Port Townsend that differ from those offered to the aluminum DSIs; and (4) whether BPA must treat Port Townsend as a “new large single load” for the purposes of its contract with Clallam. Alcoa and the Cooperative also challenge the actual rates incorporated by BPA into the aluminum DSI contracts. Alcoa argues that it is entitled to purchase power from BPA at a cost-based rate, and that, under the monetary benefit provisions of its contract with BPA — which utilize a mutually agreed upon FPS rate as a baseline — it is, as a practical matter, subject to a market-based rate. The Cooperative, on the other hand, argues that the rate assumptions that determine the monetary benefit BPA pays to the aluminum DSIs are impermissibly low and thereby result in an unlawful subsidy. This issue is ripe for review. While this Court ordinarily is not permitted to review rate-making decisions until those decisions are final and have been approved by FERC, see Ass’n of Public Agency Customers, 126 F.3d at 1177, 1179, BPA affirmatively stated in the Supplemental ROD that “[a] formal rate proceeding is not legally required for BPA to negotiate a rate within [the FPS] rate schedule ... and[,] in this case in particular, would add little or nothing to the record already developed----” BPA, in other words, has indicated that it does not plan to seek approval from FERC of the rate assumptions underlying the monetary payments or use the formal rate-making procedures outlined in § 839e(i) with respect to those payments. Because the parties do not challenge BPA’s assertion that no formal rate-making procedure, including FERC approval, is required here, we assume, without deciding, that BPA is correct. As BPA plans to take no further action with respect to the amount of monetary benefits specified in the DSI contracts or the method by which they are calculated, the benefit mechanism represents the “consummation of the agency’s decisionmaking process” by which BPA’s “obligations ... [were] determined,” see Bennett v. Spear, 520 U.S. 154, 178, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997) (internal quotation marks and citations omitted), and thus qualifies as a final agency action subject to our review under the catch-all review category. For similar reasons, Industrial Customers’ challenge to the rate applicable to the sale of power to Clallam is also ripe for review. Industrial Customers argues that the BPA/Clallam contract rate is impermissibly low because it is “not the DSI rate, the NR rate for new large single loads, or the market price of electricity.” Like the rate used to calculate the level of the aluminum DSIs’ monetary benefit, the BPA/Clallam contract rate is a negotiated rate made pursuant to the FPS rate schedule. As noted, BPA asserts that it is not legally required to seek FERC approval of a rate negotiated under the FPS rate schedule. Because the agency provides no indication that it nonetheless plans to seek FERC approval of the Clallam contract rates, we can only assume that it does not plan to do so. A review of BPA’s notice of proposed 2007 wholesale power rates, which describes the scope of BPA’s 2007 wholesale rate-making process, confirms this assumption. See 70 Fed.Reg. 67,685 (Nov. 8, 2005). In the ratemaking notice, BPA states: The DSI Service decisions [embodied in the RODs] finalized and established the manner and method by which BPA would provide service and benefits to its DSI eustomers[, including Port Townsend]. The decisions in that ROD resolved the method and level of service to be provided DSIs in the FY 2007-2011 period. Pursuant to § 1010.3(f) of BPA Hearing Procedures, the Administrator directs the Hearing Officer to exclude from the record any material attempted to be submitted or arguments attempted to be made in the hearing which seek to in any way revisit the appropriateness or reasonableness of BPA’s decisions made in the DSI ROD. Id. at 67,689 (emphasis added). Because no parties contest BPA’s claim that the Clallam contract rates have been “finalized” and “established,” we hold that ICNU’s challenge to that rate is ripe for review. In its final challenge, the Cooperative asserts that BPA lacks statutory authority to allocate the costs it will incur under the contracts with the DSIs into the rates the agency charges its preference customers. We lack jurisdiction to review this challenge, because it is not, at present, ripe for adjudication. See, e.g., DBSI/TRI IV Ltd. P’ship v. United States, 465 F.3d 1031, 1038 (9th Cir.2006) It has long been established in this circuit that petitions seeking review of BPA’s rate-making decisions — including both the allocation to rates of the costs of acquiring additional power, and language in power sales contracts affecting rate-making — are not reviewable until FERC has approved the rates in question. See Ass’n of Pub. Agency Customers, 126 F.3d at 1177, 1179; Pub. Utils. Comm’n of Cal. v. FERC, 814 F.2d 560, 561 (9th Cir.1987); Pub. Utils. Comm’r of Oregon v. BPA, 767 F.2d 622, 629 (9th Cir.1985) (“If FERC fails to correct any defects in the methodology [which affected ratesetting], redress is available in the court of appeals,” where “any ... cognizable challenges will be fully reviewable ____”). Until then, we lack jurisdiction to review PNGC’s challenge to BPA’s allocation of the costs of the DSI contracts to its members’ rates. III. Merits A. Standard of Review Petitioners here challenge decisions made by BPA in the DSI Service ROD and Supplemental ROD and embodied in the DSI contracts. We affirm BPA’s actions unless they are “arbitrary, capricious, an abuse of discretion, or in excess of statutory authority.” Aluminum Co. of Am. v. BPA, 903 F.2d 585, 590 (9th Cir.1990). The basis for each of the challenges brought here is a contention that BPA has exceeded its authority under its governing statutes — the Project Act, the Transmission Act, the NWPA and the RPA — or that its decisions are arbitrary and capricious. When reviewing a challenge to an agency’s statutory authority, “[o]ur inquiry must begin ... by examining the statutory language.” Ass’n of Pub. Agency Customers, 126 F.3d at 1169. If “Congress has spoken directly to the issue,” so that there is a “clearly expressed intent,” id. (citing Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)), we “reject administrative constructions of a statute that are inconsistent with the statutory mandate or that frustrate the policy Congress sought to implement.” Aluminum Co. of Am., 891 F.2d at 752. “When relevant statutes are silent on the salient question, we assume that Congress has implicitly left a void for [the] agency to fill,” and, therefore, we “defer to the agency’s eonstruction of its governing statutes, unless that construction is unreasonable.” Ass’n of Pub. Agency Customers, 126 F.3d at 1169; see also Golden NW. Aluminum, 501 F.3d at 1045. This Court “has been particularly deferential to BPA,” Portland Gen. Elec. Co. v. BPA 501 F.3d 1009, 1025 (9th Cir. 2007), “for three reasons: First, the enabling legislation is highly technical and complex. Second, the Agency was intimately involved in the drafting and ... [third,] Congress has, for nearly half a century, monitored BPA performance in electricity regulation and allocation.” Pub. Util. Dist. No. 1 v. BPA, 947 F.2d 386, 390 (9th Cir.1991) (internal quotation marks omitted). In particular, we have identified the question of “how best to further BPA’s business interests consistent with its public mission” as a statutory “gap” that Congress left to BPA to fill. Ass’n of Pub. Agency Customers, 126 F.3d at 1171 (internal quotation marks omitted). Applying appropriate deference, we uphold the agency’s assessment of whether its actions “further BPA’s business interests consistent with its public mission,” so long as the assessment is not unreasonable. Id. B. BPA’s Obligation To Supply the DSIs’ Requirements for Physical Power at a Cost-Based Rate Alcoa, the Cooperative, and BPA each offers a different interpretation of BPA’s statutory authority to sell power to the DSIs. Alcoa asserts that § 839c(d) obligates the agency to sell DSIs power at a cost-based rate. By contrast, the Cooperative contends that § 839c(d) is no longer operative, and that BPA therefore has no authority to sell power to DSIs thereunder, but instead must price its sales to DSIs at market rates. BPA argues for a middle ground: it maintains that § 839c(d) authorizes but does not obligate it to sell power to the DSIs. The agency does not stop there, however. It further contends that, because it is not obligated to sell power to the DSIs, it may use its § 839c(f) authority to sell the DSIs power at an FPS rate without first offering them power at the cost-based IP rate. For the reasons discussed in detail below, we conclude that none of these positions is entirely correct. We agree with BPA that § 839e(d) authorizes but does not obligate the agency to sell power to the DSIs. However, we also hold that, if the agency chooses to offer firm power to the DSIs, whether pursuant to its § 839c(d) or § 839e(f) authority, it must first offer them the IP rate. 1. Obligation To Sell Power to the DSIs Alcoa argues that BPA’s decision to guarantee only a capped, monetary benefit to the aluminum DSIs in the contracts violated the NWPA, because the NWPA creates a perpetual obligation for BPA to satisfy the DSIs’ full energy requirements through sales of power at a cost-based rate. The Cooperative claims, on the other hand, that since the expiration in 2001 of the initial long term contracts mandated by § 839c(d)(l)(B), BPA no longer has authority to sell power to the DSIs under § 839e(d)(l), and, therefore, any such sale must be authorized by § 839c(f)’s provisions for the agency’s sale of surplus power at a market rate. Compare 16 U.S.C. § 839c(d)(l)(A) (“[BPA] is authorized to sell in accordance with this subsection electric power to existing direct service industrial customers.”) with § 839c(f) (“[BPA] is authorized to sell, or otherwise dispose of, electric power, including power acquired pursuant to this and other Acts, that is surplus to [its] obligations incurred pursuant to subsections (b), (c), and (d) of this section, in accordance with this and other Acts applicable to [BPA].... ”). Because, as we explain, Congress has not “clearly expressed [its] intent” in § 839c(d), we defer to BPA’s reasonable construction of the statutory text. Ass’n of Pub. Agency Customers, 126 F.3d at 1169. Doing so, we hold here — as we have previously assumed, but not decided— that neither petitioner is entirely correct, and that “ § 839c(d) authorize^] but d[oes] not obligate BPA to sell the DSIs any power.” M-S-R Pub. Power Agency v. BPA 297 F.3d 833, 838 (9th Cir.2002). Section 839c(d)(l) reads: (A) The Administrator is authorized to sell in accordance with this subsection electric power to existing direct service industrial customers. Such sales shall provide a portion of the Administrator’s reserves for firm power loads within the region. (B) After [the effective date of this Act, BPA] shall offer in accordance with subsection (g) of this section to each existing direct service industrial customer an initial long term contract that provides such customer an amount of power equivalent to that to which such customer is entitled under its contract dated January or April 1975 providing for the sale of “industrial firm power.” Alcoa maintains that the use in § 839c(d)(l)(B) of the term “initial” in describing the initial long term contracts indicates Congress’s intent that BPA is required to enter into successor agreements. Alcoa suggests that any interpretation to the contrary would render Congress’s use of the word “initial” superfluous, in contravention of basic principles of statutory construction. Boise Cascade Corp. v. EPA, 942 F.2d 1427, 1432 (9th Cir.1991). The Cooperative argues, to the contrary, that the phrase “in accordance with this subsection,” § 839c(d)(l)(A), means that BPA’s authority to sell power to the DSIs extends only to the “initial long term contracts” specified in § 839c(d)(l)(B), particularly because § 839c(d)(3) states that the agency “shall not sell amounts of electric power, including reserves, to [the] existing[DSIs] in excess of the amount permitted under [§ 839c(d) ](1),” unless specific requirements, not present here, are met. The statutory text is far from clear, but, for several reasons, does not compel the conclusion that successor sales agreements with the DSIs under § 839c(d) are prohibited. First, § 839c(d)(3) specifies neither what is meant by the “the amount permitted under [§ 839c(d) ](1),” nor, therefore, what additional sales are prohibited. It is true that the provision could be read to ban any sales of industrial firm power subsequent to those made under the initial long term contracts. On the other hand, it also could be understood as prohibiting only concurrent sales — that is, while the original long-term contracts were still in effect — “in excess of the amount permitted under [§ 839c(d) ](1),” but not affecting subsequent sales of power — that is, after the initial agreements expired. BPA has - adopted the latter interpretation. Its position is that it now can make new sales of power to the DSIs under § 839c(d)(l)(A), even though it previously had asserted in Kaiser Aluminum & Chem. Corp. v. BPA, 261 F.3d 843 (9th Cir.2001), that it could not make such sales during the term of the initial agreements. See id. at 849-850 (discussing BPA’s position that during the term of the initial long term contracts, the agency could not sell power under § 839c(d) in addition to that provided under the initial long-term agreements mandated in § 839c(d)(l)(B)). BPA’s understanding of § 839e(d)(3) is a reasonable construction of ambiguous language and is therefore entitled to Chevron deference. The agency’s construction of the subsection does not contradict BPA’s position at the time of Kaiser, because Kaiser involved sales during, rather than after, the term of the initial agreements. See 261 F.3d at 849-850. Second, the use of the phrase “initial contract” gives rise to a reasonable inference that contracts following the initial long term agreements are not precluded; “initial” suggests that others may follow. The statutory context lends considerable support to this interpretation, as it provides for “initial long-term contracts” for BPA’s preference customers and the IOUs as well as for the DSIs, see § 839c(g)(l), and definitively contemplated follow-on contracts, after the term of the initial agreements, for those groups of customers. . See § 839c(b)(l), (b)(3), (c)(1); see also Ass’n of Pub. Agency Customers, 126 F.3d at 1166 (noting that “[t]he DSIs’ 1981 Contracts with BPA required any DSI wanting to continue purchasing BPA power after the 20-year term to request a replacement contract by June 30, 1993,” thereby assuming the authority, but not the obligation, to enter into such contracts). Third, the inclusion of § 839e(d)(l)(A) in the Act as a separate, general grant of authority to BPA to sell power to the DSIs also suggests that the agency’s authority to do so is not limited to the specific mandate to offer initial long-term contracts set forth in- § 839c(d)(l)(B). Subsection 839c(d)(l)(A) states what BPA “is authorized” to do — sell power — without specifying any time limitation; subsection (d)(1)(B) provides what BPA “shall” do with respect to a limited time period. BPA’s authorized-but-not-obligated interpretation thus has the advantage of giving full effect to the statutory text. See Cent. Montana Elec. Power Coop., Inc. v. Adm’r of the BPA 840 F.2d 1472, 1478 (9th Cir. 1988). In contrast, under the Cooperative’s interpretation, the general authorization contained in subsection (A) is superfluous; subsection (B) would suffice if all that was intended was an obligation to enter into one set of contracts. Finally, BPA’s authorized-but-not-obligated understanding of the interrelationship of subsections (A) and (B) is also consistent with the Act’s legislative history. The House Interior Committee’s report on S. 885 states that “[s]ection 5(d)(1) authorizes [BPA] to sell power to its existing direct-service industrial customers and requires [the agency] to offer to such customers initial long-term power sale -contracts.” H.R.Rep. No. 96-976, pt. 2, at 34 (1980) (emphasis added). Similarly, the House Commerce Committee Report on S. 885 — the bill that became the NWPA, see Cal. Energy, 807 F.2d at 1464 — states that “[s]ection 5(d)' authorizes the Administrator to sell power to existing direct service industrial customers.” H.R.Rep. No. 96-976, pt. 1, at 61 (1980). The report goes on to explain that, in addition to mandating that “[i]nitial long-term 20-year contracts are to be offered by BPA” to the DSIs, “[subsequent contracts ... are authorized but not mandated.” H. Rep. No. 96-976, pt.l, at 61 (1980). We conclude that BPA is authorized to sell the DSIs non-surplus . power under § 839c(d)(l)(A). At the same time, we do not adopt Alcoa’s suggested interpretation — that BPA is obligated, rather than merely authorized, to sell power to the DSIs. Contrary to Alcoa’s suggestion, the phrase “initial long-term contract” does not necessarily indicate that successor agreements are required rather than permitted. That an object is at the “beginning” of a process in no way dictates that the process will continue in perpetuity. Certainly, every time Alcoa signs an “initial contract” with one of its customers, the company does not believe it is entering into a lifelong commitment. Alcoa nonetheless contends that if Congress had meant to obligate BPA to enter into only one long-term contract with the DSIs, it would have simply referred to a “long-term contract,” not an “initial long-term contract.” But “initial” could have been meant just as a reference back to subsection (A), confirming that there may be later contracts as-well. The interpretation Alcoa suggests is not one that we, BPA, or, for that matter, Alcoa itself, previously has taken from the text of § 839c(d)(l)(B). See M-S-R, 297 F.3d at 838. Nor is Alcoa’s perpetual obligation position consistent with the meaning that members of Congress involved in the NWPA’s enactment ascribed to the section. See H.R.Rep. No. 96-976, pt. 1, at 61 (stating that after the “[i]nitial long-term 20-year contracts[,] .... [subsequent contracts ... are authorized but not mandated.”). Alcoa sees evidence to the contrary in the legislative history of the NWPA and in BPA’s own understanding of the Act at the time of its passage. The company points to a statement in the House Interior Committee Report on S. 885 that § 839e(b) “mandates continued BPA power sales to existing [DSIs],” H.R.Rep. No. 96-976 Pt. 2 at 48, and a statement by BPA’s administrator that the NWPA “contemplates in [§ 839c(d) ] additional, future contracts with each existing [DSI]” following the initial agreements. Alcoa reads too much into these statements. Nothing in the above-quoted sentence from the Committee Report or its surrounding text indicates that “continued ... power sales” is for sales after the initial agreements, as opposed to the initial agreements themselves (which are, of course, “mandate[s]”). Indeed, additional language in the Committee Report supports the latter interpretation: “Existing DSIs will receive the amount of power to which they are entitled under present ‘Industrial Firm’ power sales agreements.” H.R.Rep. No. 96-976, pt. 2, at 48. Moreover, BPA’s administrator’s statement that subsequent contracts are “contemplated” under § 839e(d) — a far from imperative term — is completely consistent with the view that the Act “authorized but did not obligate BPA to sell the DSIs any power.” M-S-R, 297 F.3d at 838. Alcoa further argues that because “[u]nder accepted canons of statutory interpretation, we must interpret statutes as a whole,” Boise Cascade, 942 F.2d at 1432, Congress’s mention of sales to the DSIs in various sections of the NWPA shows that it intended BPA to have an ongoing obligation to sell power to them. The strongest support for this contention is the requirement in § 839c(d)(l)(A) that “sales [to the DSIs] shall provide a portion of the [BPA]’s reserves for firm power loads.” Alcoa maintains that this language requires ongoing sales by BPA to the DSIs, so as to provide these reserves. Again, the plain text of the statute permits but does not command the interpretation Alcoa suggests. The language in question could be read to recognize such a requirement. But it also reasonably can be read to mean that if BPA elects to sell power to the DSIs under § 839c(d), a portion of this power must be available to BPA as reserves. BPA adopted the latter interpretation as more consistent with the NWPA as a whole, which, according to BPA, indicates that Congress was focused on assuring that BPA has some reserves to protect its operations, rather than on the particular source of these reserves. -See, e.g., § 839a(17) (defining “[r]eserves” as “electric power needed to avert particular planning or operating shortages ... [that are] available to [BPA] (A) from resources or (B) from rights to interrupt ... portions of the electric power supplied to customers.”) (emphasis added). BPA’s interpretation of the ambiguous “reserves” language is reasonable, and so entitled to Chevron deference. Nor do the other sections of the NWPA which discuss sales to the DSIs compel us to reach the conclusion Alcoa proposes. Contrary to Alcoa’s assertion, the fact that § 839e(b)(2)(A)(I) requires BPA to take into account the costs of “[DSI] customer loads which are ... served by [BPA]” (emphasis added), in its rate ceiling does not prove that DSI loads must be served by BPA. Again, it is just as reasonable to read the provision to require that if BPA chooses to serve DSI loads, it must take the costs of such service into account. Along these same lines, the fact that we have construed § 839b(d)(2), which provides that BPA must act in accordance with a regional power plan, to require that BPA’s regional plan reflect loads for which the DSIs have requested service, see M-S-R, 297 F.3d at 844, does not mean that BPA is obligated to satisfy that -request. Instead, our stated assumption when announcing this holding was- that BPA is “authorized but ... not obligate[d]” to serve the DSIs. Id. at 838. Alcoa’s position that the NWPA must be understood to mandate perpetual sales to the DSIs is further undermined by another consideration: When Congress did want to impose an obligation to supply a class of customers with their requirements for power, it did so quite explicitly. With regard to preference customers and the IOUs, the NWPA provides that, “[wjhenever requested, [BPA] shall offer to sell to each requesting public body and cooperative entitled to preference and priority ... and to each requesting [IOU] electric power to meet the firm power load of such [customer].... ” § 839c(b)(l) (emphasis added). The DSIs are not mentioned as customers to whom this language applies, and the NWPA does not contain any other equivalent provision concerning BPA’s sales to them. While Congress specifically directed BPA to provide “initial long-term contracts” to all of its traditional classes of customers, see § 839c(g)(l)(A)-(D), it only mandated that the agency provide power “whenever requested,” § 839c(b)(l), to only some of them — and not to the DSIs. We must infer, therefore, that Congress intended to exclude service to the aluminum DSIs from this general mandate. See White v. Lambert, 370 F.3d 1002, 1011 (9th Cir.2004) (“It is axiomatic that when Congress uses different text in ‘adjacent’ statutes it intends that the different terms carry a different meaning.”); see also, e.g., Barnhart v. Peabody Coal Co., 537 U.S. 149, 168, 123 S.Ct. 748, 154 L.Ed.2d 653 (2003) (applying the canon of expressio unius est exclusio alterius ). We conclude, in sum, that BPA’s interpretation of the NWPA as authorizing but not obligating the agency to sell nonsurplus firm power to the DSIs is a reasonable one. We therefore reject both the Cooperative’s contention that such sales are prohibited and Alcoa’s contention that BPA has an ongoing obligation to sell power to the DSIs under § 839c(d)(l). 2. Obligation to Offer Power at a Cost-Based Rate As explained in note 17, supra, under the monetary benefit provisions in the aluminum DSI contracts, the rate the DSIs ultimately pay for the physical delivery of power once the BPA monetary payments are taken into account, while below the market rate, is nonetheless subject to market fluctuations and increases when market rates rise above a certain point. Unhappy with this exposure to market volatility, Alcoa argues that BPA must sell it power at a purely cost-based rate that does not vary with market rates. By contrast, BPA asserts that its governing statutes do not obligate it even to offer the DSIs a cost-based rate, let alone supply power (or its monetary equivalent) at such a rate. Rather, BPA contends that it may offer power to the DSIs as “surplus” power under § 839e(f) at the FPS rate schedule — which, as discussed, we are assuming permits BPA to offer power at any mutually-agreed upon rate, including market-based rates — without first offering that power to the DSIs at one of its FERCapproved, costbased rates. Alcoa does not clearly indicate which of BPA’s three published cost-based rates— the PF rate, the IP rate, and the NR rate — it believes it is statutorily entitled to. Because the IP rate, which § 839e(c) describes as “the fate ... applicable to direct service industrial customers,” is the most obvious contender, we consider that rate first. a. The IP rate According to BPA’s interpretation of the NWPA, the IP rate applies only to sales that BPA makes to DSIs pursuant to § 839c(d). Id. BPA then notes, as we have also concluded, that § 839c(d) authorizes, but does not obligate, the agency to sell power to the DSIs. The agency concludes from this circumstance that any power in excess of that (1) which is requested by its preference customers or IOUs under § 839c(b) and (c), or (2) which the agency itself elects to sell the DSIs under § 839c(d), qualifies as “[s]urplus power” that BPA is authorized “to sell, or otherwise dispose of’ under § 839c(f). BPA sells such “surplus power” pursuant to the FPS rate schedule at a negotiated FPS rate. Thús, by refusing to sell to the DSIs pursuant to its authority under section 839c(d), BPA believes, it can effectively create “surplus power” that it can then offer to sell to the DSIs (or any other in-region customers) at any rate it chooses. BPA’s interpretation of § 839e(c) and its relationship with § 839c(d) is unreasonable on two grounds. First, it ignores the plain language of the statute and, in so doing, renders the IP rate superfluous. Second, it runs counter to the NWPA’s legislative history, which evinces Congress’s intent that BPA offer power to the DSIs, if at all, at the IP rate, not at some other rate of its choosing. For these reasons, we hold that BPA, when entering into contracts for the sale of firm power to a DSI, must initially offer the IP rate. Only after the DSIs have refused to purchase power at the IP rate may BPA offer them power under the FPS rate schedule. i. Statutory Analysis The language of § 839e(c), which is entitled “Rates applicable to direct service industrial customers,” does not support BPA’s contention that the IP rate applies only to sales made pursuant to § 839c(d). Section 839e(c) states, in relevant part, (1) The rate or rates applicable to direct service industrial customers shall be established — ... (B) for the period beginning July 1, 1985, at a level which the Administrator determines to be equitable in relation to the retail rates charged by the public body and cooperative customers to their industrial consumers in the region. (2) The determination under paragraph (1)(B) of this subsection shall be based upon the Administrator’s applicable wholesale rates to such public body and cooperative customers and the typical margins included by such public body and cooperative customers in their retail industrial rates but shall take into account— (A) the comparative size and character of the loads served, (B) the relative costs of electric capacity, energy, transmission, and related delivery facilities provided and other service provisions, and (C) direct and indirect overhead costs, all as related to the delivery of power to industrial customers, except that the Administrator’s rates during such period shall in no event be less than the rates in effect for the contract year ending on June 30,1985. The statutory text does not reference section 839c(d) or otherwise suggest the limitation BPA reads into it. Rather, it straightforwardly — and generally — states “the rate or rates applicable to direct service industrial customers shall be established” pursuant to certain standards. § 839e(c) (emphasis added). Second, and more importantly, BPA’s position would render the IP rate a nullity. If this Court were to adopt BPA’s interpretation of §§ 839e(c) and 839c(d), BPA would retain complete discretion over the decision whether to offer DSIs power at the purely cost-based IP rate or at an FPS rate of BPA’s choosing, including a market-based rate higher than the IP rate. Basic economics establishes that a rational seller of a commodity product, if provided a choice between the market rate and a cost-based rate, will either choose to offer the market rate (if the market rate exceeds the cost-based rate) or be forced to accept the market rate (if the market rate is below the cost-based rate). Thus, BPA, if acting rationally and in accordance with its “mandate to operate with a business-oriented philosophy,” see Ass’n of Pub. Agency Customers, 126 F.3d at 1171, would never sell power to the DSIs at the IP rate. Why would Congress have required BPA to “establish” a rate, specified the formula it would be “based upon,” and stated that “the rate or rates” are “applicable to [DSI] customers,” § 839e(c) (emphasis added), if that rate could not possibly apply to any sale? In its initial ROD, BPA states that it chose not to use the IP rate as the baseline for calculating the monetary benefits payable to the DSIs because it believed the DSIs could not afford the rate and would therefore reject any contract that provided power (or its monetary equivalent) at that rate. Whether or not this assertion is correct, it does not excuse BPA’s failure to at least offer the rate, because the DSIs will not always prefer an FPS rate. In Kaiser, for example, the DSIs sought to purchase power at the IP rate once that rate became more economical than a market-based FPS rate. See Kaiser, 261 F.3d at 848. Were we to agree that BPA has complete discretion to select between the IP rate and an FPS rate, BPA would, as noted, always choose an FPS rate, and the DSIs would never receive the option to purchase power at the IP rate. Our conclusion is supported by BPA’s actions in Kaiser, where, when presented with the opportunity to charge an FPS rate rather than the IP rate, BPA did so. See id. Because Congress must have intended the IP rate to apply to at least some contracts, we conclude that BPA must at least offer the IP rate, established pursuant to section 839e(c), to the DSIs before entering into a contract with the DSIs at a rate authorized under the FPS rate schedule. ii. Legislative History Our conclusion that BPA’s interpretation of its governing statutes is unreasonable is further underscored by the fact that it contradicts the legislative history of the Act. That history contains extensive evidence that Congress intended the IP rate to be the default price for sales of power to the DSIs, and gives little indication that Congress intended BPA to have discretion to offer them power at a self-created FPS rate instead. First, relevant Committee Reports make clear that “rates applicable to direct service industrial customers” are those set under Section 7(c) of the Act, i.e., § 839e(e). H.R.Rep. No. 96-976, pt. 1, at 69 (“Section 7(c) prescribes the rates applicable to direct service industrial customers.”); S.Rep. No. 96-272 at 59 (“This rate applies to all ‘Industrial Firm’ sales to BPA’s direct-service industries ... [for] 1985-86 and all future [sales].”) (emphasis added). By contrast, there is no indication that Congress intended BPA to offer power to the DSIs at rates set under § 839e(f), when it can do so at a rate set under § Í339e(c). The House Commerce Committee Report describes Section 7(f) of the Act, which became 16 U.S.C. § 839e(f), as providing the authority for “establishing] the rate or rates for sales to investor-owned utilities other than sales pursuant to the [residential] exchange [program], preference customers for power needed to meet the requirements of new large single ‘loads’ and all other miscellaneous sales.” H.R.Rep. No. 96-976, pt. 1, at 69. Noticeably absent from this list are direct sales to DSIs. Similarly, sales made under § 7(f) are described in the Senate Report as exclusive of sales to the DSIs under § 7(c) (§ 839e(c)). Compare S. Rep. 96-272 at 66 (discussing § 7(c) and stating that “after June 1985 the rate applicable to BPA direct service industrial customers will be based upon the retail rates applicable to industry served by BPA preference utility customers.”) with id. at 60 (“[SJubsection 7(f) of the proposed legislation!:] ... [t]his rate applies to all other firm sales including but not limited to (1) Investor-owned utility total load growth ... (2) New Large Industrial loads served by preference customers; (3) Amounts of additional power needed by Regional Rate loads ... once such loads exceed the capability of the Federal Base System resources and the IOU Exchange Power ....”) (emphasis added). iii. Kaiser Aluminum BPA’s capstone argument on this point is that its decision not to sell power to the DSIs at the IP rate cannot be unreasonable as it is consistent with the decision in Kaiser Aluminum & Chem. Corp. v. BPA, 261 F.3d 843 (9th Cir.2001). In Kaiser Aluminum, Petitioners argue[d] that the only rate established for the sale of the Surplus Firm Power is the IP-96 rate, and BPA abused its authority when it refused to sell the Surplus Firm Power at that rate. Petitioners further contended] that because BPA refused to sell Petitioners the Surplus Firm Power at the IP-96 rate and evidence indicates that BPA sold power at the FPS-96 rate outside the Pacific Northwest, Petitioners were not granted their regional preference under the Preference Act. 261 F.3d at 848. The IP-96 rate was, at that time, the rate “applicable to [DSI] customers” under § 839e(c), while the FPS rate was a rate schedule for sales of “all other ... power,” under § 839e(f). See Kaiser, 261 F.3d at 850. Our holding in Kaiser was that “BPA acted reasonably and in conformity with governing statutes when it offered to sell[the DSIs] Surplus Firm Power at the FPS-96 rate, and rejected Petitioners’ offers to purchase such power from BPA at the IP-96 rate.” Id. at 851. Despite a superficial similarity to the circumstances of this case, for reasons we now explain Kaiser does not negate but, instead, underscores the unreasonableness of BPA’s interpretation of its governing statutes as applied here. Most importantly, BPA glosses over key distinctions between the statutory and factual context in Kaiser and the one we face here. In Kaiser, the DSIs sought to purchase power from BPA in 1999, prior to the 2001 expiration date of the initial long-term contracts mandated by the NWPA. See id. at 846, 848. The DSIs had, however, terminated or waived portions of their purchase rights under the initial longterm contracts, so the power the DSIs wanted to buy was “surplus to BPA’s long term obligations” to them under the contracts. Id. at 846-47, 851. The agency’s position in Kaiser, therefore, was not simply that it had no obligation to make the new sales under the § 839e(c) rates that the DSIs wanted, but that it also lacked statutory authority to do so under § 839c(d). BPA’s contention, which we accepted, was that the requested transactions would constitute a sale under § 839c(d) of power “in excess” of the initial longterm contracts, which was prohibited by § 839c(d)(3). Kaiser, 261 F.3d at 850. BPA, we concluded, could not sell power to the DSIs at the IP-96 rate because this rate was established only for industrial firm power, which, at that time, could be sold only under the original long-term agreements. See id. at 850 (“[Additional power sales to DSIs are not covered by Section [839e](c), under which the IP-96 rate was authorized, because that section requires the establishment of rates for DSIs under Section [839c](d), the section which provides for the sale of Industrial Firm Power by means of long term contracts with the DSIs.”). In sum, the power the DSIs sought to purchase from BPA in Kaiser was energy that was not required by the agency’s preference customers or the IOUs, but that also could not be sold to the DSIs at the IP-96 rate. See id. at 848-50. We did not face in Kaiser, as we do here, a situation in which the agency has failed to offer the DSIs contracts for industrial firm power at the IP rate even though it is authorized to do so. Indeed, BPA does not assert here, as it did in Kaiser, that its governing statutes preclude it from offering power to the DSIs at the IP rate. See id. at 849. In fact, BPA makes the opposite assertion: It argues that it is statutorily authorized to sell firm power to the DSIs at the IP rate, but is simply choosing not to do so. Thus, BPA’s and this Court’s justification in Raise?' for allowing BPA to sell power at the FPS rate rather than the IP rate — namely, that BPA was precluded by statute from offering the IP rate due to its prior contractual obligation — is wholly absent here. See Kaiser, 261 F.3d at 850. Our interpretation of the governing statutes as requiring that BPA first offer the DSIs power at the IP rate is not only faithful to the statutes’ text, it is also more consistent with BPA’s own understanding at the time of Kaiser and before of the requirements of §§ 839c and 839e. The key claim raised by the DSIs in Kaiser was that BPA’s decision to offer energy only at the FPS-96 rate schedule was inconsistent with the agency’s position in its 1996 Rate ROD concerning the applicability of the FPS-96 and IP-96 rates. See Kaiser, 261 F.3d at 849. The position adopted by BPA in the 1996 Rate ROD was, in essence, the opposite of the one that the agency argues here. In the 1996 Rate ROD, BPA stated that BPA will not sell power to the DSIs under the FPS rate schedule if it is able to make the sale at the IP rate.... Any DSI load that BPA obtains under the FPS schedule rate is load it otherwise would have lost to the competition; BPA will make sales to the DSIs under the FPS rate schedule only when the alternative is the loss of the load. The FPS rate schedule is not an alternative to the IP-96 rate. Kaiser, 261 F.3d at 849 (quoting 1996 Rate ROD). In other words, BPA’s position was that it would only sell power to the DSIs at an FPS rate if it was not “able to make the sale at the IP rate.” Id. We relied upon this position of BPA’s in Kaiser, noting that [t]he fact that BPA indicated the IP an