Supreme Court's Attitude toward Historical Cost

In a recent article the latest Pacific Gas and Electric decision was interpreted to mean that "if the reasoning in this case is consistently followed, there will be few, if any, occasions on which a rate order based upon historical cost will be disturbed by the Supreme Court." As long as t...

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Bibliographic Details
Published in:The American economic review 1940-06, Vol.30 (2), p.352-353
Main Author: Mayer, Robert W.
Format: Article
Language:English
Subjects:
Communications
Court costs
Historical cost
Industrial economics
Property confiscation
Public utilities
State court decisions
Studies
Supreme Court decisions
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Summary:In a recent article the latest Pacific Gas and Electric decision was interpreted to mean that "if the reasoning in this case is consistently followed, there will be few, if any, occasions on which a rate order based upon historical cost will be disturbed by the Supreme Court." As long as the Fair Return doctrine continues to be the basis on which the Court judges the constitutionality of a given rate level, economists will be keenly interested in knowing whether the law of the land requires that reproduction cost be considered in determining the rate base; and the authors' conclusion, if it can properly be drawn from the opinion cited, is indeed of signal importance. It should be noted, however, that the question presented to the Supreme Court was strictly procedural-namely, whether the rejection of reproduction cost evidence constituted a violation of the due process clause. The issue of confiscation was not involved.
ISSN:0002-8282
1944-7981