colorado interstate gas federal power commissiom argued decided april motion dismiss writ certiorari denied april see colorado interstate gas federal power commissiom william dougherty new york city petitioner charles shannon washington respondents john akolt denver charles keffer amarillo petitioner chester lane charles shannon washington respondents carl wheat san francisco independent natural gas america amicus curiae special leave justice douglas delivered opinion federal power commission investigation hearing entered orders natural gas act stat finding interstate wholesale rates petitioners excessive specified amounts per year requiring petitioners reduce rates accordingly circuit appeals tenth circuit affirmed commission orders cases petitions certiorari granted limited questions presently advert petitioners refer canadian colorado interstate origin agreement made southwestern development southwestern standard oil standard cities service cities service purpose agreement bring natural gas panhandle field texas colorado markets including denver pueblo southwestern agreed transfer wholly owned subsidiary amarillo oil amarillo certain gas leaseholds producing properties new subsidiary canadian organize purpose standard agreed form new corporation colorado interstate finance construction pipeline facilities connect canadian facilities transport gas points panhandle field colorado markets cities service agreed use best efforts obtain franchises subsidiaries natural gas distributed certain cities colorado including denver pueblo gas sold colorado interstate canadian cost defined contract least years return details tripartite agreement organization financing canadian colorado interstate sufficient say companies incorporated pipeline built business put operation although canadian colorado interstate separate companies commission found properties operated single interprise canadian produces properties gas sells acres natural gas leaseholds december operating wells gathering system consists approximately miles pipe owns operates transmission line connects gathering system panhandle field ends miles distant point near clayton new mexico canadian sells gas wellhead along texas portion transmission line consumption texas also sells gas resale clayton new mexico chief portion gas transmission line sold point colorado interstate pipeline colorado interstate extends denver sells gas various distributing companies resale colorado points wyoming colorado interstate also sells gas pipeline direct industrial customers colorado use thus apparent pipeline texas colorado serves three different uses intrastate transportation sale texas interstate transportation sale industrial customers interstate transportation distributing companies resale activities subject jurisdiction commission act provides provisions chapter shall apply transportation natural gas interstate commerce sale interstae commerce natural gas resale ultimate public consumption domestic commercial industrial use companies engaged transportation sale shall apply transportation sale natural gas local distribution natural gas facilities used distribution production gathering natural gas around meaning implications provision present controversy turns allocation cost service questions raised colorado interstate raised canadian relate failure commission separate physical property used common intrastate interstate business separate used common sales gas industrial consumers sales gas resale separate property used exclusively intrastate business exclusively industrial sales commission thought unnecessary make separation properties noted nowhere evidence presented petitioners complete presentation entire operations company broken jurisdictional nonjurisdictional operations concluded accomplished allocation physical properties attained allocating costs including return latter method far practical businesslike commission adopted commodity method allocating costs cf arkansas louisiana gas city texarkana took costs divided three capacity distribution costs relating production system treated volumetric included rate return depreciation depletion leases wells volumetric costs allocated customers proportion number mcf delivered customer larger share transmission costs denver pipeline classified capacity costs supplies expenses compressing systems maintenance compressing system equipment accruals depreciation classed volumetric return income taxes denver pipeline operating labor compressing system classed volumetric half classed capacity capacity costs allocated customers ratio mcf sales customer system peak day february bore total sales customers day distribution costs composed part depreciation taxes return investment metering regulating equipment gas delivered individual stations customer allocated customer ratio investment customer bore total investment facilities available serve customers distribution costs also included operating maintenance expenses incurred operating metering regulating stations allocated basis number stations function allocation costs including return designed perform rate case character clear amount gross revenue class business known revenues derived sales rates commission power fix part gross revenues comes interstate wholesale rates commission jurisdiction problem allocate class business fair share costs course immaterial revenues intrastate sales direct industrial sales may exceed costs since authority regulate phases business lacking extent however revenues interstate wholesale business exceed costs allocable phase business interstate wholesale rates excessive use method cases produced following results canadian excess revenue revenues costs costs regulated unregulated colorado interstate excess revenue revenues costs costs regulated unregulated commission include rate reductions ordered excess revenues costs unregulated business reductions ordered measured solely excess revenues costs regulated business case colorado interstate case canadian colorado interstate canadian make several objections method maintain first place segregation physical property based upon use necessary payment due use property public service may determined reliance position rested minnesota rate cases smith illinois bell telephone cases involved state regulation intrastate rates companies intrastate interstate business rule fashioned use situations written natural gas act congress indeed prescribed formula determining interstate wholesale business whose rates regulated segregated phases business whose rates regulated essentially legislative function munn illinois congress sure provided judicial review commission orders review limited keeping commission within bounds congress created congress fails provide formula commission follow courts warranted rejecting one commission employs unless plainly contravenes statutory scheme regulation congress prescribed formula duty commission follow say natural gas act commission employ one allocation formula formula must entail segregation property separation properties merely step determination costs properly allocable various classes services rendered utility several classes services common use property difficulties separation obvious allocation costs matter involves judgment myriad facts claim exact science hamilton cost standard price law cont prob neither separation properties fact separable function integrated whole justice brandeis speaking groesbeck duluth ry noted much easier reject formulas presented misleading find one apparently adequate act appropriateness formula employed commission given case raises questions fact law colorado interstate claims commission formula ignored least failed give full effect priority wholesale gas direct industrial priority recognized contracts industrial users municipal franchises years interruptions curtailments service direct industrial customers appear slight moreover extent priority accorded wholesale gas actually exercised test year allocation costs made commission gave full effect seen volumetric costs allocated customers proportion number mcfs delivered customer year capacity costs allocated ratio mcf sales customer system peak day bore total sales day formula used reflected actual curtailments load customer year system peak day colorado interstate objects commission treated transmission line unit points laterals equipment metering stations used exclusively making wholesale sales used exclusively making intrastate sales direct industrial sales used common varying degrees several classes business pointed example line north pueblo used almost exclusively regulated business commission formula pipeline treated gas went pipe texas came denver city gate objections partially met manner distribution costs referred allocated partial answer since pertained metering regulating equipment laterals segregated however appear used commonly direct industrial rather wholesale sales convinced direct industrial sales saddled greater costs laterals segregated gravamen complaint industrial sales burdened costs part system direct industrial gas never uses contention points earlier observation judgment discretion control separation property allocation costs sought reduce component parts business functions integrated whole commission found direct industrial market pueblo colorado wholesale market denver pipeline constructed therefore obviously fair determine transmission costs pipeline whole compute mileage demand basis way beneficiaries entire project share equitably cost allow costs accumulate closer gas gets denver assume extension denver separate project earlier customers way dependent circumstances illustrate considerations fairness mere mathematics govern allocation costs cf wabash valley electric young said also answers canadian complaint wholesale sales texas consumption towns dalhart hartley texline texas burdened large share transmission costs see situation difference customers ones located distant points pipeline colorado interstate objects part commission treatment transmission costs whereby assigned return capacity costs volumetric costs contention entire return transmission facilities apportioned capacity costs theory volumetric costs relation property required meeting maximum demands wholesale business method employed departs requirements fair return property devoted public service seen capacity costs allocated customers ratio mcf sales customer system peak day bore total sales customers day apparent direct industrial sales carry lighter share costs merely use pipeline may less system peak day commission points method advanced colorado interstate used amount paid industrial customer transportation gas pipeline measured customer use throughout year might substantial use system peak day might slight event industrial customer obtain extent free transportation gas colorado interstate also makes objection selection use february system peak day allocation capacity cost component transmission costs basis use day argued mean temperature day fahrenheit zero much lower mean tures experienced colorado area temperature drops load resale gas rapidly increases capacity costs allocated basis use coldest day resale gas carry greater portion stop develop point carefully considered colorado interstate contention read record either days selected colorado interstate taken system peak days allocated industrial gas larger portion capacity costs commission allocated showing say choice february unfair colorado interstate canadian object commission use return commission included total cost service companies per cent return rate base words per cent return computed basis property used petitioners various classes sales direct industrial sales interstate wholesale sales apparent reduction ordered based excess revenues classes business aggregate costs result reduce common level profits class case whenever company making higher return unregulated business rate return allowed regulated business excess earnings unregulated part appropriated entire business unregulated business operated loss less return allowed excess earnings regulated business appropriated unregulated business low rate might therefore concealed siphoning earnings unregulated business high rate might built making regulated business share losses unregulated one said happened true seen commission ordered rate reduction based solely excess revenues costs including return derived regulated business none excess revenues costs including return unregulated business included reduction commission determining costs unregulated business used higher rate return increased costs business reduced excess revenues allocable since commission method allocation amount excess reflected reduction ordered difference result cases presented per cent allowed commission rate base limits earnings whole enterprise per cent also true return merely measures earnings allowed regulated business noted excess earnings colorado interstate makes direct industrial sales basis per cent return annually commission pointed colorado interstate earnings excess per cent rate return sales customers rate return entire business increased approximately per cent placing effect reductions rates ordered herein objections made canadian colorado interstate phase case need mention one contended findings commission allocation costs inadequate cases remanded commission appropriate findings may made findings commission regard leave much desired since quite summary incorporate reference commission staff exhibits allocation cost path followed discerned believe findings vague obscure make judicial review contemplated act perfunctory process cf chicago carolina freight carriers canadian sales colorado interstate commission ordered blanket reduction sales price types gas sold canadian colorado interstate substantial part gas sold colorado interstate resale direct industrial customers canadian maintains commission authority fix rate sale portion class gas colorado interstate sec act however provides noted provisions act apply sale interstate commerce natural gas resale ultimate public consumption domestic commercial industrial use canadian however seeks support position declaration act business transporting selling natural gas ultimate distribution public affected public interest find warrant saying words distribution public imply distribution domestic users alone industrial users much part domestic users commercial users distribution one distribution moreover declaration policy may used take act express provision subjecting regulation gas sold resale use furthermore declaration policy contained narrow canadian suggests goes say federal regulation matters relating transportation natural gas sale thereof interstate foreign commerce necessary public interest sales resale industrial users embraced broad sweep language canadian also seeks support position proviso act commission shall authority suspend rate sale natural gas resale industrial use canadian infers provision rates subject regulation commission short answer however authority commission suspend rates restricted rates jurisdiction commission authority rates question proviso unnecessary accordingly seems clear gas sold canadian colorado interstate resale including sold resale industrial use subject rate regulation commission suggestion canadian argument since commission treated canadian colorado interstate integrated system purposes allocation costs limited rate reduction rates jurisdiction two companies fact one argued event sales canadian colorado interstate latter direct sales industrial users subject jurisdiction commission difficulty colorado interstate purchases gas canadian purchase price interstate wholesale rate operating expense colorado interstate resale rates computed moreover canadian required act rate colorado interstate rate schedule file commission unless new rate schedule filed old schedule changed commission rate exacted canadian paid colorado interstate rate therefore hardly maintained colorado interstate allowed operating expense lesser amount gas purchases canadian producing gathering facilities sec already quoted provisions act opply production gathering natural gas commission determined rate base includes canadian production gathering properties well interstate transmission system return allowed commission limited per cent rate base computed commission made allowance working capital enable canadian carry production gathering operations commission made allowance canadian operating expenses included cost producing gathering natural gas commission applied formula allocation costs canadian production gathering properties well facilities thus canadian contends contrary mandate commission undertaken regulate production gathering natural gas reliance position sought provisions act pointed declares business transporting selling natural gas ultimate tribution public affected public interest federal regulation matters relating transportation natural gas sale thereof interstate commerce necessary public interest transportation sale include production gathering sections emphasize distinction thus rate regulating provisions act refer charges sale natural gas subject jurisdiction commission sec relates extension improvement facilities abandonment subject jurisdiction commission construction extension facilities sale natural gas subject jurisdiction commission pointed apart sections act refer sec gives commission power investigate cost production transportation natural gas company cases commission authority establish rate governing transportation sale natural gas goes said aid state regulation sec authorizes commission ascertain determine order fix proper adequate rates depreciation amortization several classes property company used useful production transportation sale natural gas sec provides company subject jurisdiction commission shall charge operating expenses depreciation amortization charges classes property prescribed commission charge respect class property percentage depreciation amortization prescribed therefor commission said however accounting requirements distinct fixing rates charged public utility transportation services distinction emphasized said proviso section shall limit power state commission determine exercise jurisdiction respect company percentage rates depreciation amortization allowed class property gas company composite depreciation amortization rate purpose determining rates charges provisions give commission authority require reports companies assets liabilities maintenance operation facilities production natural gas like said mere information requirements quite consistent absence power regulate production gathering natural gas see interstate commerce commission goodrich transit authority given commission said merely supplement commission powers sections act sec grants commission power determine adequacy inadequacy gas reserves held controlled company propriety reasonableness inclusion operating expenses capital surplus delay rentals forms rental compensation unoperated lands leases said supplement commission authority construction extension abandonment facilities service determination amortization rates accounting requirements support canadian position also sought legislative history act pointed declared purpose legislation occupy field held might act see federal power commission hope natural gas noted senator wheeler sponsored legislation senate said debate answer inquiry whether bill undertook regulate production natural gas producers natural gas attempt regulate producers natural gas distributors natural gas sell wholesale interstate commerce various materials argued commission authority include producing gathering facilities rate base include production gathering expenses operating expenses said commission follows course regulates production gathering natural gas contrary provisions act argued correct procedure commission allow operating expenses company whose rates empowered fix field price market value commodity gas finds way transmission lines interstate transportation sale precisely argument west virginia appearing amicus curiae advanced hope natural gas case rejected argument case pp particularly page nt reviewed length view seriousness urged canadian also independent natural gas association america appeared amicus curiae adhere decision hope natural gas case briefly state reasons company defined act person engaged transportation natural gas interstate commerce sale interstate commerce gas resale canadian company plain therefore commission authority fix interstate wholesale rates obvious rates utility fixed value property affected stated hope natural gas case value end product process starting point page page company owns producing properties gathering system restricted earnings rate order value property affected congress course might provided producing gathering facilities excluded rate base allowance made operating expenses fair field price gas commodity thought wiser course search act vain mandate committee report stated act provided regulation along recognized less standardized lines novel provisions certainly use rate base reflects property utility whose rates fixed customary bonbright valuation property ch xxx smith control power rates england annals prior act method employed fixing rates gas well electric utilities see willcox consolidated gas cedar rapids gas cedar rapids newark natural gas newark railroad commission pacific gas electric lone star gas texas say commission lacks authority depart base method hold commission precluded using ample indications throughout act port view sec empowers commission investigate ascertain legitimate cost property every company depreciation therein found necessary purposes facts bear determination cost depreciation fair value property noted gives commission authority require companies carry proper adequate depreciation amortization accounts also fix rates several classes property company used useful production transportation sale natural gas already stated gives commission authority determine adequacy inadequacy gas reserves company also empowers determine reasonableness inclusion operating expenses capital surplus delay rentals forms rental compensation unoperated lands leases sec though designed limit power state regulatory agencies plainly designed aid commission functions suggest congress designed act thinking terms ingredients rate base deductions might made additions contemplated exclusion property used useful production natural gas made type property singled special treatment treated property must read context whole act must reconciled explicit provisions describe normal conventions making mean part provides act shall apply production gathering natural gas given meaning certainly provision precludes commission control activity producing gathering natural gas example makes plain commission control drilling spacing wells like may put limitations commission decide preclude commission reflecting production gathering facilities natural gas company rate base determining expenses incident thereto purposes determining reasonableness rates subject jurisdiction treatment producing properties gathering facilities course indirect effect said like forms price fixing may reduce value property regulated federal power commission hope natural gas supra page page true whether used canadian first object gas owns given valuation proceedings obviously value act say commission value fair field price commission abandoned method regulation held hope natural gas case act result reached method employed controlling theory impact rate order counts total effect rate order said unjust unreasonable judicial inquiry act end page page commission followed canadian method excluded producing properties gathering facilities base valued gas price reduce earnings level present order effect producing properties gathering facilities precisely present case since provision act require commission value gas price urged canadian problem review whether end result unjust unreasonable point whatever method taken fixing rates affects value underlying property hence read petitioners read congress put floor producing properties gathering facilities fixed minimum return considerations lead us conclude prevent commission taking account productions properties gathering facilities natural gas companies fixes rates original cost production gathering facilities commission found actual legitimate cost canadian property including producing properties gathering facilities december deducted accrued depreciation depletion added working capital gross plant additions december result rate base commission rounded commission rejected estimates reproduction cost new less observed depreciation conjectural probative value adopted original cost best reliable evidence property values pp canadian maintains leaseholds included improper value commission canadian offered evidence present market value much higher also offered evidence commodity market value natural gas per mcf give much higher value production phase canadian business stop develop details lines evidence say commission duty put leaseholds valuation urged canadian unless revise said federal power commission natural gas pipeline overrule federal power commission hope natural gas supra held cases commission bound use single formula determining rates hope natural gas case sustained rate order based actual legitimate cost insistent claim producing properties given valuation reflected market price gas cases held question courts rate order challenged whether order viewed entirety measured end results meets requirements act standard vague devoid meaning render judicial review perfunctory process standard finance resting stubborn facts investor company point view important enough revenue operating expenses also capital costs business include service debt dividends stock cf chicago grand trunk ry wellman standard return equity owner commensurate returns investments enterprises corresponding risks return moreover sufficient assure confidence financial integrity enterprise maintain credit attract capital see state missouri ex rel southwestern bell tel public service commission justice brandeis concurring federal power commission hope natural gas supra page page hence say matter law commission erred including production properties rate base actual legitimate cost termined consideration end result rate order question limited review granted case cost canadian affiliate seen canadian colorado interstate origin agreement made southwestern standard cities service pursuant agreement southwertern organized canadian wholly owned subsidiary transferred gas leaseholds producing property owned amarillo wholly owned subsidiary southwestern cash consideration transfer advanced standard per cent interest colorado interstate organized standard construct operate pipeline connect canadian facilities transport gas denver market intermediate points canadian issued bonds finance portion total project colorado interstate purchased bonds part proceeds sinking fund bonds standard purchased par canadian repaid advance made standard proceeds sale bonds colorado interstate canadian stock issued southwestern carried canadian books canadian entered contract colorado interstate whereby canadian agreed produce sell gas colorado interstate twenty years might extended colorado interstate contract included canadian operating expenses interest amortization lieu depreciation depletion retirements canadian indebtedness period also provided canadian contract decreased profits might obtain sources including local sales thus obvious canadian contract profits available dividends stock accordance agreement colorado interstate issued per value preferred stock shares par common cities services received common stock rest common stock preferred divided equally southwestern standard latter paid cash share preferred common southwestern received preferred common stock also cash proceeds bonds canadian issued amortized part gas sold colorado interstate canadian canadian contends commission included rate base gas leases producing properties acquired amarillo original cost properties amarillo commission allowed said treatment permit capitalization amounts open door renewal past practices utility industry properties traded affiliated interests inflated prices expectation public foot bill agree southwestern owned producing properties beginning transaction one subsidiary owned end transaction another subsidiary southwestern subsidiaries intercompany profit amarillo rather canadian entered project sold bond issue southwestern part proceeds paid loan standard certainly amount payment properly included rate base fail see difference substance another wholly owned subsidiary utilized southwestern fact negotiations southwestern standard arm length bearing present problem end result property transferred one southwestern pockets another impact consumers utility service ups inflation capital assets transactions otherwise obvious prevalence practice holding company field gave rise insistent demand federal regulation see doc pt sess utility corporations final report federal trade commission bonbright means holding company ch vi barnes economics public utility regulation et seq american opposed position merely indicates proper treatment intercompany transaction fact additional investment shown exist affirmed justice roberts justice reed dissent much opinion approves allocation commission investments expenses transmission properties concur dissent chief justice canadian river gas federal power commission et al justice jackson concurring concur upholding orders federal power commission companion cases consistently federal power commission hope natural gas otherwise opinion hope case laid fundamental principles decision language statutory standard reasonable result reached method employed trolling theory impact rate order counts total effect rate order said unjust unreasonable judicial inquiry act end fact method employed reach result may contain infirmities important federal power commission hope natural gas supra page page case introduced judicial review administrative action philosophy end justifies means taught regard questionable philosophy dissented still adhere dissent law understand majority ready reconsider true act excludes gathering natural gas jurisdiction commission commission imposed direct regulation upon activity join holding exceeded jurisdiction others question immediate upon production gathering gas statute commands commission regulate price natural gas transported sold wholesale interstate commerce resale commission investigated fiscal aspects production gathering bearing reasonableness interstate rates suppose commission free take evidence conditions events quite beyond regulatory jurisdiction thought affect cost whose price directed determine see done course commission order whose primary impact rates interstate markets important secondary effect production producers gas industry organized commission fix interstate price reaction indeed think commission wisely fix reasonable price without considering incidental effect production let figures compiled conventional theories govern rate natural gas seems little better draw figures hat cases confirm strengthen view stated hope case entire base method rejected pricing natural gas though might used determine transportation costs cases vividly demonstrate delirious results produced method orders instances result three different prices gas well regulated company part owner unregulated company part owner land owner royalty share production certain wells regulated company buys gas interstate business allowed pay operating expenses unregulated contract price share different unregulated contract price royalty owner share share allowed substantially less either method making identical product single well going consumers three prices depending owns make sense cases furnish another example capricious results method kind case commission put five important leaseholds containing approximately acres rate base something cents per acre three leases put rate base zero original cost used bought discovery gas thereon company took high risk wildcat exploration thus allowed return per cent nothing three leases return less year others present market value shown testimony million dollars fairly say commission exceeded jurisdiction obtaining evidence making calculations even though evidence related production gathering gas think fantastic method fixing reasonable price gas however thrashed hope case recede views therein stated hope provides workable basis judicial review key commissions anticipate rule control review guidance counsel issues try try think however majority promulgated decision majority majority permitted continue spell application specific problems see leads difficult cases might impossible follow rule hope reaching decision intuitive knowledge whether given price reasonable fundamental concept reasonable price industry find rejected happens case illustrates aspects problem pricing gas appear reasons shall state failure company case convince wronged reduction prices ordered commission regulation concern present future rather past formula take account conditions trends source supply regulated use price tool bring goods obtain public service needed amount gas price reached legal economic reason go higher rate one perform function unwarranted supply comes region overproduction owners ready sell less fair return investment reason public pay hand supply plentiful price sufficient incentive exploit fails bring forth quantity needed price unwisely low even square perfectly somebody idea return base problem course know price level adequate perform economic function case throws light subject hope trying discuss abstractly evidence shows facts learn way practical buyer seek learn price company able willing ready bring gas interstate wholesale market might called test test course available fully regulated industry peculiarly adapted conditions natural gas industry developed petitioner colorado interest gas company sells colorado fuel iron company large quantity gas industrial use consumption approximates inhabitants denver colorado fuel iron used plants denver supplied public service rates fuel iron company never regulated public authority may gas company contracted extend fuel iron supply contract five years cents per boiler fuel cents per purposes gas sold wholesale company denver city gate local distributing company cents per course differences conditions delivery must allowed gas field transmitted roughly miles field colorado fuel iron another miles denver per cent transportation added per cent entire price fuel iron company gas mean attributing zero value field entire selling price transportation bring gas city gate denver cents based boiler gas cents based gas instead cents charged another difference must allowed denver public service priority industrial gas time shortage impressive legal advantage one whose real worth depends number duration interruptions causes actual practice tabulation reductions suspensions service fuel iron company appears suffered interruptions december shortest fifteen hours longest fifty hours belittle may costly industrial nothing indicates account difference price every indication colorado fuel iron price really bargained one gas company position seems stated one witnesses panhandle case may heresy say try charge nonregulated customers traffic bear may candor heresy normal spirit market place record shows colorado fuel iron mercy gas company bargaining arm length good bargaining position using fuels gas company bid business fuel competition pressure gas company able ready willing part gas delivered miles field cents per denver rate local distributing company purchaser subsidiary cities service one three companies owned pipe line gas supply sellers gas local company distributing manufactured gas comparison natural gas look cheap cheap necessary draw invidious inferences intercorporate relationships conclude rate denver gate vigorously bargained one much influenced competitive considerations great economic advantages natural gas householders relative wastefulness industrial use developed opinion hope strongly suspect history transaction explanation difference uncommon argument used justify lower price industrial household users supply denver required laying pipe line requires operating requires overhead business carry additional fuel iron business required lay first miles pipe diameter instead additional revenue industrial sales add proportion capital investment overhead operating expense thus charging denver wholesale purchasers resale public charged service stood alone company may justify industrial sales low rates good business petitioner management point view think accepted principle public regulation industrial gas may free ride pipe line compressor operate anyway say big consumer free ride coal trains run anyway true natural gas act forbids discrimination regulated rates forbid discriminations regulated unregulated ones think precludes use voluntary fairly bargained selling price standard reasonable price use unregulated price basis comparison think reduction wholesale rates resale public order makes low price industrial business less desirable public interest reasons fully stated hope like reverse case think rate reduction wrong think real inwardness gas business affects future obscured commission preoccupation bookkeeping historical matter considerations may relevant theories satisfying coming generation look back judge present regulatory method light exhausted largely wasted gas supply matter stands see legal grounds reversal canadian river gas federal power commission et al chief justice stone dissenting justice roberts justice reed justice frankfurter opinion federal power commission making rate order attack exceeded jurisdiction reached result must rejected unauthorized applicable statute fixing rates petitioner interstate business transporting selling natural gas resale commission included petitioner gas wells gas gathering facilities together transportation distribution facilities single rate base valued wells gathering facilities prudent investment cost many years ago valuation drastically less present market value restricted petitioner return rate base including wells production facilities constituting approximately total rate base thus subjected petitioner production gathering property regulation statute imposes upon petitioner property used useful interstate transportation sale gas resale think natural gas act plain terms prohibits natural gas act stat et amended february stat et seq declares business transporting selling natural gas ultimate distribution public affected public interest federal regulation matters relating transportation natural gas sale thereof interstate foreign commerce necessary public interest execution policy act set complete scheme regulation rates charges transportation sale natural gas gas companies wholesale interstate commerce section defines natural gas company person engaged transportation natural gas interstate commerce sale interstate commerce gas resale section provides provisions act shall apply transportation natural gas interstate commerce sale interstate commerce natural gas resale shall apply transportation sale natural gas production gathering natural gas rejects petitioner contentions provisions preclude commission including gas wells gathering facilities rate base petitioner regulated business regulation begins delivery gas petitioner transmission pipe line includes statute provides interstate transportation sale gas resale petitioner insists since wells gathering facilities subject commission regulation cost value gas upon delivery petitioner transmission line must purposes rate regulation regulated business transportion sale taken fair market value issue first time presented decision question raised decided federal power commission hope natural gas although mentioned amicus brief state west virginia party suit issue raised parties case gas wells gathering property included rate base valued prudent investment cost allowed return restricted objection taken inclusion production property rate base either circuit appeals far record shows application commission rehearing section provides objection commission order may considered unless raised application commission rehearing production property included rate base without objection consider question raised respect property admitted properly part rate base namely whether valuation commission allowed rate return within constitutional limits cf cohens virginia wheat act speaks terms activities regulated subjects interstate transportation sale natural gas activity jurisdiction commission includes exercise rate making function prescribed concededly extends valuation property used interstate transportation sale natural gas determination fair rate return upon value even though production gathering thought part regulated transportation sale possibility precluded words say provisions act including prescribe rate making activity transporting selling wholesale shall apply another activity production gathering natural gas seem possible say plainer unmistakable language one activity interstate transportation sale subjected production gathering excluded valuation rate making powers commission interpret words gathering way government able suggest referring physical activities drilling spacing gas wells thus excluding activities alone regulation seems hardly plausible true gathering activities may include drilling spacing gas wells sale referred phrase shall apply transportation sale natural gas production gathering natural gas also activity yet government concede command act apply activity transportation sale petitioner property used transportation sale gas industrial consumers excluded rate base thus reach surprising conclusion property used one sort activity provisions act declared apply may nevertheless included rate base holding another sort property also used activity provisions act phrase declared apply nevertheless excluded rate base plausibility government construction aided reference provisions giving commission power make investigations regulate accounts gather information find values property natural gas companies depreciation provisions obviously directed aiding commission exercise various powers conferred upon unrelated regulation production gathering natural gas section example authorizes commission procure information costs production transportation natural gas aid state commissions purpose sections give authority essential commission admitted power regulate interstate sale gas wholesale determine whether cost charge gas acquired natural gas company whose rates regulated excessive unrelated fair market value especially relations producer interstate wholesale distributor arm length fuel gas railroad commission smith illinois bell tel western distributing public service dayton power public utilities natural gas slattery arkansas gas cf goodrich transit determination commission permitted respect amount gas reserve essential determination rate depreciation amortization gas company regulated transmission line since useful life normally limited available gas supply reason founded upon language statute purpose advanced disregarding plain command excluding production gathering gas activities transporting selling subject regulatory provisions language well chosen accomplish exactly legislative history shows intended accomplished report house committee sess recommending adoption bill became natural gas act shows beyond doubt purpose legislation bring federal regulatory control interstate transportation sale natural gas held subject state regulation missouri kansas gas cf public util commission attleboro steam electric leave undisturbed matters subject state regulation included production gathering see illinois natural gas central illinois public service federal power commission hope natural gas supra upon floor senate sponsor bill declared attempt regulate production natural gas distributors natural gas sell wholesale interstate commerce exemption production natural gas regulation thought regulatory authorities exclude regulation commission price gas producing field appears hearings upon predecessor contained provisions identical substantially equivalent act finally passed declared provisions bill apply production natural gas exclusion production gathering natural gas regulatory authority commission command commission regulate excluded otherwise powers reserved encroached upon contrary words purpose act pretended government set commission action without authority congress commission deny command justified disregard saying production gathering operations integral part total operations including transportation interstate commerce sale natural gas resale interstate commerce added investigation canadian production gathering property operations indispensable regulating canadian rates charges sale natural gas interstate commerce resale investigation undoubtedly proper necessary order ascertain fair unregulated value natural gas produced unregulated field delivery petitioner transmission pipe line order enable commission regulate appropriately sales price gas mean fixing rates regulated business derives distributed product unregulated business property latter segregated regulated property rightly applied standards valuation rate return applicable regulated business int com goodrich transit supra smith illinois bell tel supra western distributing public service supra otherwise exclusion regulation meaningless standards applied order make certain regulated business paying much product currently apply unregulated business pointed recognized solicitor commission hearings proposed legislation culminating present act said unregulated field price controlling upon commission transaction arm length transaction arm length course reasonableness may inquired decisions one thing say investigation necessary ascertain fair unregulated value petitioner gas produced quite another say commission say necessary permissible commission fix value petitioner production property gas produces far market value restrict petitioner return unregulated business produced gas production unregulated restrictions justified authorized rate regulation regulation petitioner gas wells production facilities specifically exempted command statute regulated utility procures unregulated source product distributes proper cost regulated company allowed pay commission authorized regulate production presents problem free difficulties commission made effort meet difficulties except one course statute forbids subjecting production property regulation familiar permissible way meeting petitioner points treating property unregulable law unregulable fact applying standards value return currently prevail unregulated business conducted arm length petitioner urges courses open commission violate statute uncontradicted evidence record showing matural gas market value wellhead point delivery petitioner transmission line conditions indicate gas production property area question ascertainable market value absence regulation petitioner free receive return currently produced property without appropriate investigation know fact commission us determine investigation discloses difficulties legislation cope answer legislation disregard existing legislation commission made determination investigation far appears given consideration evidence supporting petitioner contentions duty commission conduct proceedings restrict action within jurisdiction conferred upon plain performed duty required whether facilities production natural gas regulated whether regulation left think congress left matters congress determine thought petitioner profits production gas great unregulated thought important reduced immensely important accomplished lawless action answer cite authorities involving state order prove commission acted within statutory authority reviewing cases accept state construction statutes fixing jurisdiction state regulatory bodies justification commission action say applying hope case end result commission action petitioner unregulated property confiscated authorized utility regulation may course result permissible diminution property values income provided regulation exceed constitutional limitations hence loss damage caused authorized utility regulation gives rise actionable wrong regulation within constitutional limitations principle laid hope case diminution value return caused unauthorized regulation unlawful without reference constitutional principles hope case contention utility production property subject regulation question whether return upon allowed statutory authority confiscatory went beyond constitutional limits power regulate question deprivation petitioner property commission action excess statutory power regulate power case petitioner production property think exist far unauthorized regulation deprives petitioner property deprivation justified saying authorized violate constitution absence confiscation authorized commission regulation prove commission legislative authority regulate footnotes latter resales made gas transports gas point near littleton colorado cheyenne wyoming proceedings company consolidated canadian colorado interstate commission also ordered reduction rates charged gas order review certain points gas federal power commission decided today commission report characterized volumetric costs variable costs capacity costs fixed costs residual refining credit determined deducted production costs fifteen times years far appears canadian presented evidence showing cost intrastate sales said return leases wells treated volumetric costs per cent return denver pipeline treated volumetric per cent capacity costs return investment metering regulating equipment treated distribution costs respects accounting cost money invested enterprise see schlatter advanced cost accounting ch xii neuner cost accounting lawrence cost accounting ch objected allocation made commission results discrimination purchasers gas colorado interstate indicated fact costs allocated one customer distant denver greater costs allocated another customer denver commission order aggregate reduction wholesale rates produce fair return adjustment rate schedules various delivery points yet made see federal power commission natural gas pipeline another section act refers gives commission certain functions perform two propose compacts dealing conservation production transportation distribution natural gas secs cf british standards described smith control power rates england annals help know reasonable price gas learn outstanding securities many gas companies organized operated days issued stocks bonds without supervision prove gas rate low show pay dividends inflated values rate proved excessive fact pays large dividend upon exceedingly conservative capitalization think hope use return stock bond issues repeated cases one least reliable possible tests rates section authorizes investigation commission cost production natural gas commission authority establish rate governing transportation sale natural gas section empowers commission ascertain cost property every natural gas company facts bearing determination cost found necessary purposes section authorizes commission determine proper depreciation amortization several classes property natural gas company useful production transportation sale natural gas section gives commission authority require reports natural gas companies maintenance operation facilities production natural gas section gives commission power determine inadequacy gas reserves held controlled hearings upon earlier bill devane solicitor federal power commission stated also provides commission shall jurisdiction gathering gathering rates natural gas rates explained rates paid gathering field stated control gathering rate commission jurisdiction price fixed competitive conditions exist field said commission power price paid gatherer man produces binding transaction arm length transaction arm length course reasonableness may inquired decisions nothing subsequent legislative history indicate understanding respect earlier act changed later stage finally adopted indicates change hearings pp see supra wilcox consolidated gas cedar rapids gas cedar rapids newark natural gas newark public utilities commission landon pennsylvania gas public service commission railroad commission pacific gas electric lone star gas texas