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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 13, 2007Decided February 29, 2008 No. 06-1326O
LD
D
OMINION
E
LECTRIC
C
OOPERATIVE
,
 
I
 NC
.,P
ETITIONER 
v.F
EDERAL
E
 NERGY
R 
EGULATORY
C
OMMISSION
,R 
ESPONDENT
PJM
 
I
 NTERCONNECTION
,
 
L.L.C.,
ET AL
.,I
 NTERVENORS
Consolidated with06-1331On Petitions for Review of Orders of theFederal Energy Regulatory Commission
William D. DeGrandis
argued the cause for petitioners.With him on the briefs were
 Bruce D. Ryan
,
 Dennis Lane
, and
Glen L. Ortman
.
Carol J. Banta
, Attorney, Federal Energy RegulatoryCommission, argued the cause for respondent. On the brief was
 John S. Moot 
, General Counsel.
 
2
 A. Karen Hill 
,
 Donald A. Kaplan
, and
 John Longstreth
wereon the brief for intervenors PPL Electric Utilities Corporationand Exelon Corporation in support of respondent.Before: S
ENTELLE
,
Chief Judge
, and G
INSBURG
andG
ARLAND
,
Circuit Judges
.Opinion for the Court filed by
Chief Judge
S
ENTELLE
.S
ENTELLE
,
Chief Judge
: CED Rock Springs, LLC (“Rock Springs”) and Old Dominion Electric Cooperative (“OldDominion”) (together, “Petitioners”) petition for review of aFederal Energy Regulatory Commission (“FERC” or “theCommission”) order rejecting their rate filings under section 205of the Federal Power Act (“FPA”), 16 U.S.C. § 824d. They also petition for review of FERC’s order denying their request for rehearing. Because we conclude that the Commissionadequately explained its decision to deny Petitioners’ rate filingsand its decision was not unduly discriminatory, we deny their  petition for review.I. BackgroundIn 1998, Petitioner Old Dominion began planning theconstruction and development of a natural gas-fired combustionturbine generating facility to be located in Rising Sun,Maryland. The facility is now complete and consists of four generation units—two owned by Old Dominion and two byPetitioner Rock Springs—and transmission facilities consistingof a 500 kV substation and two 900-foot 500 kV transmissionlines jointly owned by Petitioners. Petitioners connected their generators to the electrical grid first by running radial lines fromtheir generators to the substation. They then looped their two900-foot transmission lines from the substation to a 500 kVtransmission line owned by PECO Energy Company (“PECO”).
 
3Electricity flows freely from other generation facilities throughPECO’s transmission lines, and subsequently, throughPetitioners’ substation and two 900-foot lines. Electricity produced by Petitioners’ generators only flows out from thegenerators onto the transmission grid via the radial lines thatconnect their generators to the substation. In other words,Petitioners’ substation and two looped 900-foot 500 kV lines arefully integrated in the electrical grid; Petitioners’ generators arenot.PJM Transmission System (“PJM”) is a regional,interconnected transmission grid composed of transmission andgeneration facilities owned by Petitioners, PECO, and others.All owners of generation and transmission facilities in the PJMTransmission System are parties to the PJM InterconnectionL.L.C. Open Access Transmission Tariff (“Tariff”). The Tariff establishes the rates, terms, and conditions of service for transmission services over the PJM Transmission System. TheTariff also requires an Interconnection Customer, a generator that needs to connect to the PJM Transmission System,to pay for 100 percent of the costs of the minimumamount of . . . Network Upgrades necessary toaccommodate its Interconnection Request and thatwould not have been incurred . . . but for suchInterconnection Request, net of benefits resulting fromthe construction of the upgrades, such cost not to be lessthan zero.Tariff § 37.2.During construction of the Rock Springs and Old Dominiongenerating facilities, Petitioners submitted an InterconnectionRequest as set forth in the Tariff for PECO to connect their generators to the PJM Transmission System. PECO indicated
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