concurring:
I agree with the majority that those portions of the Commission’s orders discussing section 6 of the Federal Power Act, 16 U.S.C. § 799 (1976), are not ripe for review. In those discussions, the Commission expressly reserved decision on whether substantial alterations to licenses presently held by Southern California Edison Company (SCE), and thus consent from SCE, would be necessitated by any license application that might be submitted by the Cities of Anaheim and Riverside (Cities). The court should neither review potential decisions of the Commission nor comment upon discussions by the Commission that are plainly dicta.
But I cannot agree that those portions of the Commission’s orders allowing SCE to withdraw its application for a preliminary permit are also nonreviewable. Preliminary permits are an integral stage of the licensing process envisioned by Congress; just as Commission decisions denying preliminary permits are reviewable, so must Commission decisions that preempt this stage be subject to immediate review by the courts. I concur with the ultimate result reached by the majority because the Commission’s actions at issue here, while ripe for review, were not “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A) (1976).
I. Reviewability
To regulate the development of hydroelectric power, Congress directed the Commission to issue licenses for the construction and maintenance of necessary facilities. 16 U.S.C. § 797(e) (1976). Because an applicant must provide the Commission with a plethora of information before a license will be issued, see id. § 802, Congress also allowed the Commission to issue preliminary permits “for the purpose of enabling applicants for a license ... to secure the data and to perform the acts required by section 802,” id. § 797(f). Such preliminary permits, not to exceed three years in duration, also provide the permit holder with a statutory “priority” in its application for a license. Id. § 798.
These statutory purposes served by preliminary permits are far from insignificant. The grant of a preliminary permit, accompanied by a statutory priority for the eventual award of a license, ensures that the permit holder will be awarded the license in any case in which the Commission determines that the permit holder’s license application is “at least as well adapted” as those submitted by its competitors. 18 C.F.R. § 4.33(h)(1) (1981). If the Commission decides that other license applications are better adapted, the permit holder will be so informed, and will be given a reasonable time in which to amend its license application so as to render it of equal quality with
*781those of its competitors. Id. § 4.33(h)(2). If the permit holder is subsequently successful in upgrading its application, it will be awarded the license. Id. Moreover, the priority for a license that attaches to the preliminary permit also overcomes other preferences that Congress included in the statute. For example, although Congress mandated that states and municipalities must be given preference when the Commission issues permits or licenses, 16 U.S.C. § 800(a) (1976), that preference does not hold when the Commission is issuing a license in a case in which a preliminary permit already has been awarded. In this latter situation, the permit holder, even if a private utility competing with a state or municipality, retains its statutory priority. Id.; see Washington Public Power Supply System v. FPC, 358 F.2d 840, 847 (D.C.Cir. 1966), rev’d and vacated on other grounds sub nom. Udall v. FPC, 387 U.S. 428, 87 S.Ct. 1712, 18 L.Ed.2d 869 (1967).
Thus, obtaining a preliminary permit ensures that the applicant’s eventual license application will be favored by the Commission. This, in turn, allows the applicant to undertake those expenditures foreseen by section 802, and required by Commission regulations, see, e.g., 18 C.F.R. §§ 4.40-.41, 4.50-.51 (1981), with the knowledge that its resulting license application will receive a priority during final consideration. Those competing applicants not awarded preliminary permits may make the same expenditures, but obviously must do so with a greater risk that their investments will be for naught.
It is presumably for these reasons that the grant of a preliminary permit to one applicant, and its denial to one or more competing applicants, consistently has been subject to immediate review by the courts of appeals. See, e.g., City of Dothan v. FERC, 684 F.2d 159 (D.C.Cir.1982); Delaware River Basin Commission v. FERC, 680 F.2d 16 (3d Cir. 1982). The question raised by the present case is somewhat, but not substantially, different — whether a Commission order allowing a private utility to preempt unilaterally the permit stage, by withdrawing its application for a preliminary permit and seeking instead to amend an existing license, should be subject to similar review by the courts. Because such a Commission decision directly affects the existence of statutory preferences and priorities at the eventual license proceeding, and therefore affects the risks assumed by competing applicants, I believe this question must be answered in the affirmative.
Review of Commission orders is governed by section 313(b) of the Federal Power Act, 16 U.S.C. § 8257(b) (1976), allowing aggrieved parties to obtain review of those decisions in the various courts of appeals. That provision clearly allows for review of final agency actions. See Papago Tribal Utility Authority v. FERC, 628 F.2d 235, 238-40 (D.C.Cir.), cert. denied, 449 U.S. 1061, 101 S.Ct. 784, 66 L.Ed.2d 604 (1980). Although the “quintessential reviewable order” under the statute is a final license determination by the Commission after a full hearing on the merits, “the reviewability of an order ... must be determined by reference to its practical function and consequences in the relevant statutory scheme,” id. at 239; see also Delmarva Power & Light Co. v. FERC, 671 F.2d 587, 592 (D.C.Cir.1982). In the situation presented by Cities’ petition for review, such a pragmatic approach requires that the court review the Commission order in dispute.
Specifically, a decision by the Commission to bypass the granting-of a preliminary permit, once the permit stage has been commenced and competing applications for permits have been filed, is little different from a Commission order granting or denying a preliminary permit.1 Like the latter deci*782sion, an order circumventing the permit stage in the circumstances presented here affects the statutory preferences and priorities to be applied at the licensing stage. In most cases, a decision by the Commission not to award a preliminary permit to either party effectively will deny the petitioning party a statutory priority that it otherwise would receive. In practice, this has the same effect as the outright denial of a preliminary permit, a denial that immediately is reviewable as final agency action. The majority is exalting form over substance, therefore, when it decides that the orders in this case are non-final and not yet ripe for review.
Nor does the review that should be accorded in this case draw the court into disputes properly within the province reserved to the discretion of the agency. Presented for review are purely legal issues of statutory construction that involve no factual disputes — i.e., the issues will not be resolved or clarified by a full hearing on the merits before the Commission. Thus, the issues are fit for review at this early stage of the proceedings. See Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967). Indeed, waiting for a decision from the Commission on competing license applications, and then reversing because of legal errors at the preliminary permit stage, merely would waste administrative resources. It is true that the Commission’s ultimate licensing decision, if it granted the license to Cities, might moot the issues now presented for review. But potential mootness, needless to say, is hot the same as lack of ripeness.
Thus, the Commission orders at issue here, to the extent that they allowed SCE to withdraw its initial application for a preliminary permit, and therefore preempted Cities’ competing application for a preliminary permit, should be subject to immediate review by this court.
II. Cities’ Challenge to the Commission’s Orders
Cities argue that the Commission decision allowing SCE to withdraw its preliminary permit application and re-apply to amend its existing license is contrary to section 7(a) of the Federal Power Act, 16 U.S.C. § 800(a) (1976). That section grants a preference to states and municipalities when they compete against other parties either for preliminary permits or for licenses where no preliminary permit has been issued. As interpreted by Cities, this provision would allow states and municipalities to lock-in their statutory preference at the preliminary permit stage. But that position ignores the public interest goals of the Federal Power Act, which plainly require that the Commission always select the best applications. The statutory preference for states and municipalities is no more than a tie-breaker, to be applied by the Commission only when competing plans are deemed to be “equally well adapted.” Id.; see Alabama Power Co. v. FERC, 685 F.2d 1311 at 1314 (11th Cir.1982). Therefore, it is proper for the Commission either to favor more fully developed license applications over preliminary permit applications or, as here, to require a state or municipality to compete at the license stage when a competitor has reached that level. At each stage, the statutory preference to which Cities are entitled is still effective: Cities will win if their application is equal to, or better than, the application submitted by SCE. Thus, the decision by the Commission was in accordance with statutory requirements, and should be affirmed.2
. The statute also allows an applicant to apply directly for a license, see 16 U.S.C. §§ 797(e), 800(a) (1976), completely ignoring the preliminary permit stage. The use of such a procedure, however, is easily distinguishable from the process followed in this case. The Commission in such a case decides only to accept the license application for filing, a decision that is clearly nonreviewable. Cf. Papago, 628 F.2d at 247 (Commission acceptance of rate filing is nonreviewable).
. A different case might be presented if the Commission, though acting within its statutory authority, acted in an arbitrary and capricious manner. But the Commission in this case clearly articulated rational reasons for its decisions, see Joint Appendix at 23-31, 97-104, thereby negating any claim that the decisions were arbitrarily or capriciously made.