federal power hope natural gas argued decided january francis shea asst atty petitioners federal power others spencer reeder cleveland ohio petitioner city cleveland william cockley cleveland ohio respondent neeley charleston state west virginia amicus curiae special leave justice douglas delivered opinion primary issue cases concerns validity natural gas act stat et et rate order issued federal power commission reducing rates chargeable hope natural gas petition review order made pursuant act circuit appeals set aside one judge dissenting cases petitions writs certiorari granted public importance questions presented city cleveland hope natural gas hope west virginia corporation organized wholly owned subsidiary standard oil since date organization business producing purchasing marketing natural gas state sells gas local consumers west virginia great bulk goes five customer companies receive west virginia line distribute ohio pennsylvania july cities cleveland akron filed complaints commission charging rates collected hope east ohio gas affiliate hope distributes gas ohio excessive unreasonable later commission motion instituted investigation determine reasonableness hope interstate rates march public utility commission pennsylvania filed complaint commission charging rates collected hope peoples natural gas affiliate hope distributing gas pennsylvania two companies unreasonable city cleveland asked challenged rates declared unlawful reasonable rates determined june date commission order latter finding requested aid state regulation afford public utilities commission ohio proper basic disposition fund collected east ohio bond ohio consumers since june cases consolidated hearings held may commission entered order made findings order required hope decrease future interstate rates reflect reduction annual basis less operating revenues established reasonable average rates per five customer companies response prayer city cleveland commission also made findings lawfulness past rates although concededly authority act fix past rates award reparations page found rates collected hope east ohio unjust unreasonable excessive therefore unlawful annual basis since found reasonable lawful rates gas sold hope east ohio resale ultimate public consumption required produce annually since commission established interstate rate base found represented legitimate cost company interstate property less depletion depreciation plus unoperated acreage working capital future net capital additions commission beginning book cost made certain adjustments necessary relate found legitimate cost plant interstate service december deducted accrued depletion depreciation found basis added future net capital additions useful unoperated acreage working capital used test year estimate future revenues expenses allowed annual operating taxes depletion depreciation exploration development costs gas purchased commission allowed net increase operating expenses amount take care future increase wages west virginia property taxes exploration development costs total amount deductions allowed interstate revenues hope introduced evidence estimated reproduction cost property also presented trended cost estimate exceeded latter designed indicate original cost property material labor prices prevailed throughout whole period construction company property since pages hope estimated condition method accrued depreciation reproduction cost new basis hope contended rate base commission refused place reliance reproduction cost new saying predicated upon facts conjectural illusory given weight proceedings page likewise refused give value trended cost since founded fact erroneous produced results page determining amount accrued depletion depreciation commission following lindheimer illinois bell telephone federal power commission natural gas pipeline based computation legitimate cost found hope years business regulation observe depreciation depletion practices accumulated excessive page one member commission thought entire amount reserve deducted legitimate cost determining rate base majority commission concluded however business brought regulation first time incorrect depreciation depletion practices prevailed deduction reserve requirement actual existing depreciation depletion rather excessive reserve made lay sound basis future regulation control rates page pointed determined accrued depletion depreciation allowed approximately annual operating expense depletion depreciation hope estimate original cost amount found commission item made largely expenditures prior december charged operating expenses chief among expenditures expended prior sum expended hope labor use hauling similar costs prior hope followed general practice natural gas industry charged cost drilling wells operating expenses hope continued practice public service commission west virginia required capitalize expenditures commission present uniform system accounts commission refused add items rate base stating greater injustice consumers done allow items operating expenses later date include rate base thereby placing multiple charges upon consumers page reason commission excluded rate base expenditures properties hope acquired utilities latter charged payments operating expenses commission disallowed certain overhead items amounting also previously charged operating expenses refused add interest construction since interest fact paid hope contended allowed return less commission found return unreasonable fair rate return rate return applied rate base produce annually compared present income less circuit appeals set aside order commission following reasons held rate base reflect fair value property commission determining considered reproduction cost trended original cost legitimate cost prudent investment proper measure value price levels changed since investment concluded costs overhead items amount included rate base held accrued depletion depreciation annual allowance expense computed basis fair value property basis legitimate cost circuit appeals also held commission power make findings past rates aid state regulation concluded findings proper step process fixing future rates viewed light however findings deemed invalidated errors vitiated findings rate order based order reducing rates congress provided natural gas act natural gas rates subject jurisdiction commission reasonable rate charge reasonable hereby declared unlawful sec gives commission power hearing determine reasonable rate thereafter observed fix rate order sec also empowers commission order existing rates unjust unlawful lowest reasonable rates congress provided review rate orders commission facts supported substantial evidence shall conclusive congress however provided formula reasonable rate determined filled details general expressed specific rule fixed principle reasonable sustained constitutionality natural gas act natural gas pipeline case stated congress regulate prices commodities interstate commerce least great fifth amendment fourteenth regulate prices commodities intrastate commerce page page indeed one species munn illinois fixing prices like applications police power may reduce value property regulated fact value reduced mean regulation invalid block hirsh nebbia new york cases cited however indicate value end product process starting point circuit appeals held heart matter rates made depend upon value value going enterprise depends earnings whatever rates may anticipated held federal power commission natural gas pipeline supra commission bound use single formula combination formulae determining rates function moreover involves making adjustments page page commission order challenged courts question whether order entirety meets requirements act page page statutory standard reasonable result reached method employed controlling cf los angeles gas electric railroad commission west ohio gas public utilities commission west chesapeake potomac tel dissenting opinion 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 moreover commission order become suspect reason fact challenged product expert judgment carries presumption validity upset rate order act carries heavy burden making convincing showing invalid unjust unreasonable consequences cf railroad commission cumberland tel lindheimer illinois bell tel supra pages pages railroad commission pacific gas process act fixing reasonable rates involves balancing investor consumer interests thus stated natural gas pipeline case insure business shall produce net revenues page page considerations aside investor interest legitimate concern financial integrity company whose rates regulated investor company point view important enough revenue operating expenses also capital costs business include service debt dividends stock cf chicago grand trunk 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 bell tel public service commission justice brandeis concurring conditions less might allowed important important case determine various permissible ways rate base return computed might arrived view end result case condemned act unjust unreasonable investor company viewpoint already noted hope wholly owned subsidiary standard oil securities outstanding except stock stock owned standard since par amount presently outstanding approximately compared rate base established commission total outstanding stock issued stock dividends balance issued cash assets four decades operations hope paid cash dividends moreover accumulated earned surplus thus earned total investment company nearly seven times earned per year average annual amount capital stock issued cash assets average invested capital hope average earnings year period accumulated addition reserves depletion depreciation furthermore hope paid dividends stock year half lower rates effect paid dividends earned surplus increased almost half par value outstanding stock noted commission fixed rate return permits hope earn annually determining amount stressed importance maintaining financial integrity company considered financial history hope vast array data bearing natural gas industry related businesses general economic conditions noted yields better issues bonds natural gas companies sold last years per cent page stated company enterprise whose risks minimized adequate provisions depletion depreciation past present high profits established markets affiliated distribution companies populous industralized areas supply gas locally meet ments certain peak days winter feasible supplement future gas sources page commission concluded company efficient management established markets financial record affiliations prospective business place strong position attract capital upon favorable terms required page view various considerations say annual return reasonable within meaning act rates enable company operate successfully maintain financial integrity attract capital compensate investors risks assumed certainly condemned invalid even though might produce meager return called value rate base connection recalled hope contended rate base computed reproduction cost new commission points rate base accepted hope average rate return period amount period hope earned annual average return average investment asked rate increases properties well maintained operated commission says modest rate suggests base rate computed dayton power light public utilities commission cf lindheimer illinois bell tel supra page page incongruity actual operations return computed basis reproduction cost suggests commission wholly justified rejecting latter measure rate base view disposition controversy need stop inquire whether failure commission add costs rate base consistent prudent investment theory developed applied particular cases word need added respecting depletion depreciation held natural gas pipeline case constitutional requirement owner embarks business limited life shall receive end put page page circuit appeals think rule applicable hope utility required continue service public scheduled end business day certain stipulated true natural gas pipeline co distinction quite immaterial ultimate exhaustion supply inevitable case natural gas companies moreover recognized lindheimer illinois bell tel supra propriety basing annual depreciation cost procedure utility made whole integrity investment maintained required approve contrary holding railways electric west since constitutional requirements exacting standards act rate order conforms latter run afoul former position west virginia state west virginia well public service commission intervened proceedings commission participated hearings also filed brief amicus curiae participated argument bar contention result achieved rate order consequences unjust west virginia citizens depress value gas gas lands gas leaseholds unduly restrict development natural resources arbitrarily transfer properties residents without compensation therefor west virginia points hope natural gas holds large number leases producing unoperated properties owner grantor receives operator grantee delay rentals compensation postponed drilling producing well successfully brought gas lease customarily continues indefinitely life field case operator pays stipulated rental cases gas royalty equivalent gas marketed owner operator valuable property interests gas separately taxable west virginia law contention reversionary interests leaseholds represented rate proceedings since gas sold interstate commerce argued moreover owners reversionary interests benefit value gas leaseholds interstate consumers furthermore west virginia contends commission fixing rate natural gas produced state consider effect rate order economy west virginia pointed gas wasting asset rapidly diminishing supply result west virginia gas deposits becoming increasingly valuable nevertheless rate fixed commission reduces value reduction said severe repercussions economy state argued first place result rate reduction hope west virginia property taxes may decreased view relevance earnings west virginia law assessment property tax purposes secondly pointed west virginia production gas exported state told purposes tax becomes west virginia law substantial equivalent market value thus west virginia argues undervaluation hope gas leaseholds cost state many thousands dollars taxes effect urged impair west virginia tax structure benefit ohio pennsylvania consumers west virginia emphasizes moreover deep interest conservation natural resources including natural gas says reduction value leasehold values jeopardize conservation policies three respects exploratory development new fields discouraged abandonment lowyield marginal wells hastened secondary recovery oil hampered furthermore west virginia contends reduced valuation harm one great industries state harm industry must inevitably affect welfare citizens state also pointed west virginia large interest coal oil well gas forms fuel competitive price gas materially cheapened consumers turn fuel preference others result lowering price natural gas effect depreciating price west virginia coal oil west virginia insists neglecting aspect problem commission failed perform function congress entrusted case remanded commission modification order considered contentions length view earnestness urged upon us searched legislative history natural gas act indication congress entrusted commission various considerations west virginia advanced conclusion congress pointed illinois natural gas central illinois public service purpose natural gas act provide exercise national power interstate commerce agency regulating wholesale distribution public service companies natural gas moving interstate declared interstate commerce subject certain types state regulation stated house report purpose legislation occupy field cases state missouri kansas natural gas public utilities commission attleboro steam electric held might act accomplishing purpose bill designed take authority state commissions drawn complement manner usurp state regulatory authority federal power commission given authority gathering natural gas primary aim legislation protect consumers exploitation lands natural gas companies due hiatus regulation resulted kansas natural gas case related decisions state commissions found difficult impossible discover cost interstate companies deliver gas within consuming thus thwarted local regulation supra moreover investigations federal trade commission disclosed majority mileage country used transport natural gas together increasing percentage natural gas supply transportation acquired handful holding companies state commissions independent producers communities seeking service growing quite helpless combinations types problems participating hearings occupied congress addressed specific evils federal power commission given broad powers regulation fixing reasonable rates powers attendant heart new regulatory system moreover commission given certain authority finding action necessary desirable public interest require natural gas companies extend improve transportation facilities sell gas authorized local distributor given control abandonment facilities service originally enacted natural gas company undertake construction extension facilities transportation natural gas market natural gas already served another company sell natural gas market without obtaining certificate public convenience necessity commission passing applications certificates convenience necessity commission told originally enacted intention congress natural gas shall sold interstate commerce resale ultimate public consumption domestic commercial industrial use lowest possible reasonable rate consistent maintenance adequate service public interest latter provision deleted subsection amended act february stat amendment limited grandfather rights granted companies desiring extend facilities services routes within area already serving moreover broadened require cates public convenience necessity extensions made markets natural gas already sold another company situations well provisions plainly designed protect consumer interests exploitation hands private natural gas companies comes cases abandonment extensions facilities service may assume apart express contained considerations conservation material issuance certificates public convenience necessity commission asked certificate public convenience necessity proposed construction extension faced determination amount private operator allowed earn sale natural gas across state lines established distribution system secs provide standards determination find words act history slightest intimation suggestion exploitation consumers private operators maintenance high rates allowed continue provided producing obtain indirect benefits apparently commission view matter arguments advanced presented commission adopted mean suggest congress unmindful interests producing natural gas supplies drafted natural gas act said act intrude domain traditionally reserved control state commissions federal power commission given authority production gathering natural gas addition congress recognized legitimate interests conservation natural gas congress instructed commission make reports compacts two dealing conservation production transportation natural gas commission also directed recommend legislation appropriate necessary carry proposed compact aid conservation resources within orderly equitable economic production transportation distribution natural gas thus congress quite aware interests producing natural gas supplies left protection interests measures maintenance high rates private companies commission compelled let stockholders natural gas companies feast producing may receive crumbs table present act must redesigned project raises questions policy go beyond province hardly necessary add limitation net earnings natural gas company interstate business limitation power producing state either safeguard tax revenues protect interests sell gas interstate operator return mission allowed net return charges suggested commission failed perform duty act allowed return gas production enough induce private enterprise perform completely efficiently functions public commission however oblivious matters considered allowed example delay rentals exploration development costs operating expenses serious attempt made show inadequate certainly say unless substitute opinions expert judgment administrators congress entrusted decision moreover light experience turn inadequate development new sources supply doors commission open increased allowances order time act contains machinery obtaining rate adjustments said commission placed low rate gas industrial purposes compared gas domestic purposes industrial uses discouraged noted first place rates commission fixed hope interstate wholesale rates distributors interstate rates industrial domestic consumers hardly assume view history act provisions resales intrastate customer companies distribute gas ultimate consumers ohio pennsylvania subject powers commission event rates issue moreover fail find power fix reasonable rates power fix rates disallow discourage resales industrial use committee report stated act provided regulation along recognized less standardized lines novel provisions supra yet tell commission fix rates discourage particular uses indeed injecting rate case doctrine express statutory sanction true hold nature industry required maintenance level rates natural gas companies make greater profit unit gas sold theories industry may may desirable difficulty contain conventional standards natural gas companies act february broadening gave commission additional authority deal conservation aspects problem changed standard reasonable sanction maintenance high rates natural gas company restrict use natural gas certain purposes act must amended finally suggested rates charged hope discriminatory domestic users favor industrial users charge apparently based act forbids natural gas companies maintaining unreasonable difference rates charges service facilities respect either localities classes service power commission eliminate unreasonable differences discriminations plain commission however made findings failure regard challenged petition review raised argued party hence problem discrimination proper place present decision time enough pass issue presented us congress entrusted administration act commission courts apart requirements judicial review us advise commission discharge functions findings lawfulness past rates noted commission made certain findings lawfulness past rates hope charged interstate customers findings made complaint city cleveland aid state regulation conceded act commission power make reparation orders power fix rates admittedly limited thereafter observed force commission maintains power make findings lawfulness past rates even though power fix rates however may think findings reviewable act section gives party order commission review order circuit appeals circuit natural gas company located principal place business appeals district columbia think findings question fall within category recently summarized various types administrative action determination reviewable orders urgent deficiencies act october kindred statutory provisions rochester tel pointed order sought reviewed adversely affect complainant affects rights adversely contingency future administrative action reviewable page page said view traditional conceptions federal judicial power resort courts situations either premature wholly beyond province page page see los angeles shannahan considerations apposite commission authority enforce findings exercise solely function investigation los angeles supra page page preliminary interim step towards possible future commission wholly independent agencies outcome proceedings may turn factors findings findings may never result respondent feeling pinch administrative action reversed justice roberts took part consideration decision case opinion justice black justice murphy agree opinion add nothing said patently wholly gratuitous assertion constitutional law dissent justice frankfurter refer statement acquiescence date doctrine chicago minnesota supra may fairly claimed case majority finally induced expand meaning process give courts power block efforts state national governments regulate economic affairs present case afford proper occasion discuss soundness doctrine stated justice frankfurter dissent issue controversy salutary practice whereby courts discuss issues abstract applies peculiar force constitutional questions since however dissent adverts highly controversial due process doctrine implies acceptance congress feel compelled say understand congress voluntarily acquiesced constitutional principle government courts rather legislative bodies possess final authority regulation economic affairs even always fully embraced principle wish repeat never acquiesced see federal power commission natural gas pipeline justice reed dissenting case involves problem rate making natural gas act added importance arises obvious fact principles stated generally applicable federal agencies entrusted determination rates utilities views differ somewhat brethren may value set summary form congress may fix utility rates situations subject federal control without regard standard except constitutional standards due process taking private property public use without compensation wilson new commission however freedom action powers limited constitutional standards also standards delegation standard added natural gas act rate reasonable section throws additional light meaning words phrase used congress describe allowable rates relation something ascertainable rates left whim commission rates fixed produce annual return annual return compared theoretical reasonable return risks considered fair value property used useful public service time determination abstract test precise agency charged determination wide range properly said agency disregarded statutory standards confiscated property utility public use cf chicago minnesota dissent congress intends rates left experienced agency particularly competent training appraise amount required decision reasonable return source great difficulty borrowers lenders reached agreements daily multitude situations although determination fair value troublesome essentials worked fairness investor consumer time actment act cf los angeles railroad et et results well known congress body desired depart traditional concepts fair value earnings stated intention plainly helvering griffiths already clear rates dispute produced rates afford standard decision page page historical cost prudent investment reproduction relevant factors determining fair value indeed disregarding pioneer investor risk prudent investment reproduction cost distorted changes price levels technology produce result realization risk investment speculative field natural gas utilities reflected present fair value amount evidence admitted point course agency reasonable discretion free give weight factors determine evidence judgment necessary rates agree imposing rule prudent investment alone determining rate base leaves commission free understand use available evidence finding fair value including prudent investment cost installing present time efficient system furnishing needed utility service disagreement arises primarily view makes difference commission reached rate fixed long result fair reasonable statutory command commission explicit entirely aside constitutional problem whether congress validly delegate rate making power commission toto without standards legislate light relation fair reasonable fair value reasonable return commission must therefore make findings observance relationship federal power commission construe action disregard statutory duty heard evidence relating historical reproduction cost reasonable rate return appraised weight evidence reproduction cost rejected unpersuasive evidence found rate base determination fair value base earnings allowed seem fair reasonable far commission went appraising property employed service find nothing result indicates confiscation unfairness unreasonableness good administration rate making agencies method avoid undue delay render revaluations unnecessary except violent fluctuations price levels rate making method subjected criticism congress changes standards agencies rate making bodies continue conventional theory rate making probably simpler improve present methods devise new ones major error think committed disregard commission investment exploratory operations recognized capital costs considered commission charged operating expenses company time unregulated congress direct commission rate making deduct rate base capital investment recovered unregulated period excess earnings view part investment disregarded rate base capital investment previously recovered paid dividends placed surplus even prudent investment throughout life property accepted formula figuring rate base seems illogical throw admittedly prudent cost part property earnings unregulated period sufficient return prudent cost investors reasonable return answer theory commission prudent investment utility seventeen million capital charges disallowed reasons heretofore stated affirm action circuit appeals returning proceeding commission consideration direct commission accept disallowed capital investment determining fair value rate making purposes justice frankfurter dissenting brother jackson analyzed particularity economic social aspects natural gas well difficulties led enactment natural gas act especially arising abortive attempts regulate natural gas utilities natural gas act receive application light analysis justice jackson believe drawn relevant inferences regarding duty federal power commission fixing natural gas rates exposition seems unanswered shall say words emphasize basic agreement society needs met public utilities truly public services traditional governmental functions police justice less services rendered private enterprise governmental regulation ultimately determines ways regulation decisive aspect public supervision utilities foreshadowed nearly sixty years ago railroad commission cases stone farmers loan trust decided fifty years ago final say constitution lies judiciary legislature chicago minnesota legal issues touching proper distribution governmental powers constitution may always raised congressional acquiescence date doctrine chicago minnesota supra may fairly claimed event issue controversy pointed opinions brethren congress given limited authority federal power commission made exercise authority subject judicial review commission authorized fix rates chargeable natural gas rates fix must reasonable natural gas act instead making commission rate determinations final gress specifically provided review orders sure finding commission facts supported substantial evidence made act obedience requirement congress rates reasonable issue fact commission determination conclusive otherwise nothing review except questions compliance procedural provisions natural gas act congress might seen fit cast legislation done committed administration federal power commission duty applying standards fair dealing reasonableness relevant purposes expressed natural gas act requirement rates must reasonable means reasonable relation appropriate standards otherwise congress directed commission fix rates judgment commission reasonable also provided determinations commission subject review sources commission courts go ascertaining standards relevant regulation natural gas rates point justice jackson analysis seems pertinent appear two alternatives either fixing natural gas rates must left unguided discretion commission long rates fixes reveal glaringly prophecy ability regulated utility continue service future commission rate orders must founded due consideration elements public interest production distribution natural gas involve natural gas elements reflected natural gas act act applied entirety see instance course statute concerned abstract theories ratemaking foundation interest public interest texture multiple strands includes contemporary investors contemporary consumers needs served restricted immediacy social well economic costs must counted say must left skill experts expertise rational process rational process implies expressed reasons judgment little advance public interest substitute rule smyth ames encouragement conscious obscurity confusion reaching result assumption long result appears harmless basis irrelevant may appropriate attitude state action challenged unconstitutional cf driscoll edison light power assumed design congress make accommodation conflicting interests exposed justice jackson opinion occasion blind clash forces partial assessment relevant factors either commission objection commission action rates granted low range vision narrow since issues commission involved less total public interest proceedings judged narrow conceptions common law pleading conclude case returned commission order enable discharge duty reviewing commission order commission set forth explicitness criteria guided determining rates reasonable determine public interest keeping perspective considerations set forth justice jackson justice jackson certainly theory ties formula overruled conflict federal power commission natural gas pipeline case think occasion reconsideration doctrine applied natural gas returned commission consideration light thereof commission appears understood effect two opinions pipeline case least authority perhaps direction fix natural gas rates exclusive application investment rate base theory warrant opinion chief justice however released commission subservience single formula combination formulas provided order entirety produces arbitrary result page page minority opinion understood advocate investment theory sufficient guide natural gas case view expressed since opinion expressly controverted must approved disclaim puted approval particularity attach importance beginning federal regulation natural gas industry approaching performance economic functions performance legalistic rituals solutions cases must consider eccentricities industry gives rise also act congress governed heart problem elusive exhaustible irreplaceable nature natural gas given sufficient money produce desired amount railroad bus steamship transportation communications facilities capacity generation electric energy manufacture gas kind service utilities one customer little concern amount taken another one waste deprive another volume service created equal demand today demands exhaust lessen capacity serve tomorrow wealth midas wit man produce reproduce natural gas field even reproduce gas manufactured product half heating value per unit nature natural gas quantity produced consumed available consumers availability localized utility service depended caprice nature supply hope company drawn old rich vanishing field flanks appalachian mountains center production pennsylvania west virginia fringe lesser production new york ohio kentucky tennessee north end alabama oil discovered commercial quantities depth feet near titusville pennsylvania value per barrel oil branch petroleum industry went forward unprecedented speed area productive oil gas roughed drilling wells estimated cost per cent holes five per cent wells made discoveries commercial importance resulting chiefly oil gas prospecting many years search oil strike gas misfortune waste period even later appalling gas regarded commercial value year total yield valued since contrary oil become cheaper gas field pretty steadily advanced price many years natural gas distributed small scale acceptance slow facilities utilization primitive take appearance substantial industry soon monopoly production markets developed get gas mountain country largely found centers population demand required large investment ownership facilities corporate systems including several companies controlled access markets purchases became dominating factor giving market value gas produced many small operators hope market operators natural gas appalachian field commanded average price cents per points production bringing cents points consumption companies controlled markets however rely gas purchases alone acquired held fee leasehold great acreage territory proved drilling large marketing system companies well many small independent owners operators carried commercial development proved territory development risks appear estimate proved area wells sunk appalachian field per cent failed produce oil gas commercial quantity source supply thus tapped serve centers large demand like pittsburgh buffalo cleveland youngstown akron industrial communities distribution natural gas fast became big business advantages fuel price commended business yielded handsome return merry goose hung high consumers gas companies alike time first world war almost unnoticed consuming public whole appalachian field passed peak production started decline pennsylvania given per cent natural gas field peak ohio produced per cent peak west virginia greatest producer per cent credit reached peak western new york eastern ohio fringe field production relied heavily imports pennsylvania west virginia pennsylvania producing exporting state heavy consumer supplemented production imports west virginia west virginia consuming state lion share production exported thus interest north appalachian supply conflict competition among localities share failing supply helplessness state local authorities presence state lines corporate complexities part background federal intervention industry west virginia took boldest measure legislated priority entire production favor inhabitants frustrated tion throughout region clashes courts conflicting decisions evidenced public anxiety confusion held new york public service commission power classify consumers restrict use gas commission held company abandon part territory still serve rest courts admonished companies take action protect consumers several courts held companies regardless failing supply must continue take customers compulsory additions finally held within public service commission discretion attempts throw franchises quit service municipalities resorted courts conflicting results public service commissions consuming handicapped control supply shortages world war occasioned first intervention natural gas industry federal government proclamation president wilson fuel administrator took control stopped extensions classified consumers established priority domestic industrial use war federal control abandoned cities served natural gas became dependent upon mixed gas reduced heating value relatively higher price utilization natural gas highest social well economic return domestic use cooking water heating followed closely use space heating homes true public utility aspect enterprise preservation first concern regulation gas family cooking cheaper fuel advantages end dollars cents cost delivered without interruption meter needed paid used money tied supply space used storage requires handling creates dust leaves ash responds thermostatic control ignites easily immediately develops maximum heating capacity incidental advantages make domestic life liveable industrial use induced less qualities low cost competition fuels gas exported west virginia hope company substantial part used industries wholesale use speeds exhaustion supply displaces fuels coal miners coal industry large part whose costs wages complained unfair competition industrial gas produced relatively little labor cost gas rate structures generally favored industrial users ohio average yield gas domestic consumption cents per dustrial pennsylvania figures west virginia showed least spread domestic consumers paying cents industrial although spread less parts hardly said certainly great factor hastening decline natural gas supply time world war occasional efforts companies reverse discrimination adopt graduated rates giving low rate quantities adequate domestic use graduating upward discourage industrial use rates met opposition industrial sources course since diminished revenues industrial sources tended increase domestic price met little popular commission favor fact neither gas companies consumers local regulatory bodies depended upon conserve gas unless federal regulation take account conservation efforts seem case actually constitute new threat life appalachian supply ii congress decided upon federal regulation industry exhaustive investigation aspects including failing supply competition use natural gas intensified growing scarcity pipelines appalachian area markets control handful holding company systems created highly concentrated control producers market consumers supplies holding companies dominated production distribution segregated activities separate effect purpose isolate end business reach one state commission cost natural gas consumers moved steadily upwards years proportion prices oil except element competition produced somewhat comparable conditions public came feel companies exploiting growing scarcity local gas problems region much creating demand federal regulation natural gas act declared natural gas business public interest regulation public interest originally time proceeding commenced tried also declared intention congress natural gas shall sold interstate commerce resale ultimate public consumption domestic commercial industrial use lowest possible reasonable rate consistent maintenance adequate service public interest later dropped nothing indicate still accurate statement purpose act extension improvement facilities may ordered desirable public interest abandonment facilities may ordered supply extent continuance service unwarranted present future public convenience necessity permit abandonment certain extensions made finding present future public convenience necessity commission required take account ultimate use gas thus given power suspend new schedules rates charges classification services except schedules sale gas resale industrial use gives companies greater freedom increase rates industrial gas domestic gas particularly act expressly forbids undue preference advantage person unreasonable difference rates either localities classes service power commission expressly includes determine reasonable rate charge classification rule regulation practice contract thereafter observed force view opinion commission administering act may ignore discrimination interesting reporting bill senate house committees interstate commerce pointed nationwide average price natural gas per cents domestic use cents commercial use industrial use ready think supporters bill called attention striking fact householders charged five times much gas industrial users situation bill nothing remedy hand act gave commission aptly describes powers regulation iii proceeding initiated cities cleveland akron alleged price charged hope natural gas resale domestic commercial small industrial consumers cleveland elsewhere excessive unjust unreasonable greatly excess price charged hope nonaffiliated companies wholesale resale domestic commercial small industrial consumers greatly excess price charged hope east ohio resale certain favored industrial consumers ohio therefore unduly discriminatory consumers classes service italics supplied company answered admitting differences prices affiliated nonaffiliated companies justifying differences conditions delivery allegation contract price excess price charged hope east ohio resale certain favored industrial consumers ohio hope deny price differential alleged industrial gas sold consumers sold contract schedules filed approved public utilities commission ohio certain conditions delivery made discriminatory record shows hope delivered industrial consumption domestic commercial consumption find separate figure domestic consumption served domestic consumers directly east ohio gas company peoples natural gas company affiliates owned parent special contracts industrial consumption far appear confined dozen big industries hope responsible discrimination exists favor industrial consumers controls resale price use industrial gas virtue interstate sales contracts commission exercising jurisdiction hope contract east ohio company example hope agrees deliver ohio company take natural gas requisite supply domestic consumers ohio company amounts natural gas may requisite fulfill contracts made consent approval hope company ohio company companies supplies natural gas sale gas upon special terms conditions manufacturing purposes ohio company required read domestic customers meters month meters industrial customers daily furnish meter readings hope hope company access meters consumers ohio company accounts domestic consumers ohio company fully supplied preference consumers purchasing manufacturing purposes company required supply gas used manufacturing purposes sold special contracts first submitted approved writing hope company expressly provide natural gas supplied thereunder far necessary meet requirements domestic consumers supplied pipe lines ohio company basic contract supplemented time time chiefly price last amendment letter hope east ohio contained special discount industrial gas schedule special industrial contracts hope reserving right make eliminations therefrom agreeing others might added time time approval writing said believed price concessions contained letter based costs certain conditions mutual advantage maintaining building volumes gas sold us italics supplied commission took note charges discrimination made disposition issue tendered point ordered flat reduction price per gas delivered hope interstate commerce made limitation condition provision classes consumers get benefit reduction cities accepted defending reduction view discrimination complained perpetuated increased order commission violates act commission opinion aptly characterizes entire objective saying fide investment figures become regulation rates noted theory result instruction congress bill regulate gas first congress tained following determining reasonable rates commission shall fix rate allow fair return upon actual legitimate prudent cost property used useful service question sess title iii congress rejected language see sess commission contends nevertheless important formula finding rate base prudent investment excluded investment base amount actually admittedly invested says company recouped expenditures customers days regulation earnings fair return apply earnings reduce rate base one commissioners suggested reason applying excess earnings reduce investment base roughly refusing apply reduce found difference character earnings reinvestment reason assigned difference bookkeeping treatment many years company subject regulation reinvested chiefly well drilling treated books expense commission requires drilling costs carried capital account allowed rate base thus actually determined company bookkeeping investment attributes significance formal classification account keeping seems inconsistent rational rate regulation course commission allow rate base inflated bookkeeping improperly capitalized expenses doubts resting public regulation upon rule used depending side favors company hand put gas fields calculations basis although contends lawful rule finding rate base result rate higher charged proposes matter good business charge case us demonstrates lack rational relationship conventional formulas natural gas production extremities regulating bodies brought effort rationalize commission company stands different theory neither ventures carry theory logical conclusion applied gas fields iv order judicial review interpose constitutional theories state business seeks regulate congress put upon federal courts duty toward administration new federal regulatory act hold given rate reasonable commission said reasonable review becomes costly pageant practical value anyone hand bring judgment task guidance regulators regulated reveal something philosophy legal economic social guides us need slaves formula unless point rational way reaching conclusions accepted resting intuition predilection must admit possess instinct jby know prices must seek conscious design decision sustains order reasonable makes possibly make otherwise learn holds result reached method employed controlling fact method employed reach result may contain infirmities important case determine various permissible ways rate base return computed might arrived lean somewhat considerations capitalization dividend history requirements dividends outstanding stock give real weight generally think deservedly discredit guide rate cases books already contain much talk methods rationalizing rates must appear ambiguous announce results without working methods confronted regulation unique type enterprise think requires considered rejection much conventional utility doctrine adoption concepts reasonable rates practices interest take account peculiarities business rejects suggestions opinion says committees reporting bill became act said provided regulation along recognized less standardized lines novel provisions saying sustains rate calculated novel variation rate base theory time enactment legislation recognized dissenting opinions difference seems unconscious purposeful deliberate innovation make meet necessities regulating industry us hope business two components quite divergent character one conventional undertaking essentially transportation enterprise consisting conveying gas produced point delivery buyer relatively routine operation differing substantially many utility operations service produced investment compression transmission facilities risks investing tested means conveying discovered supply gas known market rate base calculated prudent investment formula seem reasonably satisfactory measure fixing return branch business whose service roughly proportionate capital invested consequences must overlooked gives marketability hence gas owned company gives pipeline company large power marketability hence production others part reduce possession adequate supply natural opposite character erratic irregular unpredictable relation investment phase utility business thousand feet gas captured severed real estate delivery consumers recognized law property much nature ton coal barrel oil yard sand value allowed real battleground investor consumer part business chief difference parties proper rate base arises necessary price gas anchored rate base kind courts first place begin valuing bases order something else method came vogue fixing rates transportation service public obtained common carriers public received none carriers physical property make use carriage often monopoly open market criteria reasonableness put use service carrier remote irrelevant consideration making rates moreover difficulty appraising intangible service thought simplified related physical property visible measurable items might market value hoped reason known unknown gas fields turn method topsy turvy gas tangible possessible market price field value rate base elusive gas consists little use except rights reach capture gas value lies almost wholly predictions discovery price gas captured bears little relation cost tools supplies labor develop gas hope sells directly priced reasonably easily accurately components rate base valued hence reason resort roundabout way rate base price fixing exist case gas field found whatever method found rate base little help determining reasonableness price gas appraisal present value intangible rights pursue fugitive gas depends value assigned gas captured fair value rate base generally ill even urged gas company valuing fields prudent investment theory relative merits fixing rates utility creates service merely investment amount quality service rendered usual utility least roughly measured amount capital puts enterprise rational application relationship investment capacity serve relationship investment amount gas produced let us assume doe roe produces west virginia delivery cleveland quantity natural gas per day doe however luck foresight whatever takes gets gas investing leases drilling roe drilled poorer territory got smaller wells invested anybody imagine roe get get gas five times much doe spent five times much service one renders society gas business measured gets ground puts little relation investment results game poker gas hope handles buys independent producers obvious principle applied hope gas applied applied bulk gas hope delivers probable investment two producers bear ratio investments gas however goes use utilization value ultimate price regulate enterprise undiscriminatingly transplanting body rate doctrine conceived adapted ordinary utility business serve interest natural gas act requires accident justice brandeis pioneer juristic advocate prudent investment theory utilities never far able discover proposed application natural gas case hand dissenting commonwealth pennsylvania west virginia reviewed problems gas supply said field public service regulation controlling body confronted factors baffling natural gas industry none continuous supervision control required high degree natural gas rates intelligently regulated must fit legal principles economy industry try fit industry books decisions stand commission justified believing required proceed rate base method even gas field reason may merely wash hands method rationale rate making fact discussion fitness simply transferred rate base method natural gas industry happened newark natural gas fuel city newark ohio ann company wanted cents per fourteenth amendment challenged reduction cents ordinance sustained reduction careful consideration questions value property time inquiry whether rate sufficient provide fair return value property said method upon principles thoroughly established repeated secisions citing many cases one involved natural gas comparable wasting natural resource came issues state power regulate affected commerce clause public utilities commission landon pennsylvania gas public service commission questions settled called upon natural gas cases consider state claimed invalid fourteenth amendment fuel gas railroad commission kentucky fuel gas company public service commission west virginia differences chiefly difference value ascribed gas rights leaseholds one seems questioned rate base method must pursued controversy rate base must used later gas field questioned determining amount regulated company allowed pay affiliate state determination also reviewed fourteenth amendment dayton power light public utilities commission ohio columbus gas fuel public utilities commission ohio cases one sustained one struck fixed rate assumed rate base method legal way testing reasonableness natural gas prices fixed public authority without examining real relevancy inquiry weight precedents expect commission initiate economically intelligent methods fixing gas prices faces new plan federal regulation based power fix price gas shall allowed move interstate commerce consider whether rules devised fourteenth amendment exclusive tests reasonable rate federal statute inviting reargument directed point necessary see prepared hold rules apply natural gas case arising natural gas act holding leave commission fix price gas field one fix maximum prices oil milk coal commodity price calculated produce fair return synthetic value rate base individual producer undertake assure fair return producer emphasis shift producer product regulated eye average typical producing conditions field price fixing process economic lines offer little temptation judiciary become back seat drivers price fixing machine unfortunate effect judicial intervention field divert attention engaged process economically wise legally permissible probable price reductions reach economically unwise limits reach constitutional ones constitutional problems growing price fixing quite different heretofore considered inhere rate making producer difficulty showing invalidity fixed price long voluntarily continued sell product interstate commerce withdraw authority invoked compel part property different problem presented allowance rate compensate gas removed gas lands whether fixed point production point delivery probably best measured functional test applied whole industry good ill depend upon private enterprise exploit natural resources public consumption function allowance gas field perform society circumstances enough enough induce private enterprise completely efficiently utilize gas resources acquire public service available gas gas rights deliver gas rate uses future well present public interest fears tell commission fix rates discourage particular uses indeed injecting rate case doctrine due deference suggest nothing novel idea change price service commodity reacts encourage discourage use question whether consequences follow question whether effects must suffered blindly may intelligently selected whether price control shall targets deliberately aims shall handled like gun hands one know loaded recognize tool means expedient public hands much economic effects private hands hope knew concession industrial price tend build volume sales used price expedient end commission makes another cut price thinks ignore effect exhaustion supply fact natural gas regulation price must used reconcile private property right society permitted vest important natural resource claims society upon must draw balance wealth welfare carry techniques inquiry task commissioner rather judge certainly task solved mere bookkeeping requires best economic talent available doubtless inquiry price gas bringing field far price established arms length bargaining far may influenced agreements restraint trade monopolistic influences must hope really pay get replace gas delivers order get less much far prices influenced pipe line access markets consumers pay returns pipe lines far increment cause go gas producers east ohio producer ohio authorities require ohio consumers pay gas field perhaps reasons federal government put west virginia gas lower higher rates east ohio required exploit half million acres unoperated reserve ohio west virginia resources shall supplied devalued basis state complains threatens measures self keep gas worth terms fuels displaces price fixed without considering effect production gas incentive continue exploit vast unoperated reserves conducive deep drilling tests result may know trial induce bringing gas afar supplement even substitute appalachian gas distant fields cheap cheaper competitive potentiality certainly relevant consideration wise regulation must also consider private buyer alternatives producer price acceptable hope intrastate business domestic industrial customers way diverting supply intrastate sales way disposing operated reserve acreage industrial concerns buyers west virginia way conservation laws severance taxation regulated rate offends must borne mind west virginia prohibited giving inhabitants priority discriminated interstate commerce never yet held good faith conservation act applicable well others valid considering alternatives must noted federal regulation incomplete expressly excluding regulation gathering natural gas present way get gas seems call forth price inducements plain downward economic limit safe wise price nothing law compels commission fix price company might give product taking advantage scarcity monopoly supply purpose fixing maximum prices take away seller opportunity get otherwise market award goods constitutional use power fix maximum prices block hirsh marcus brown holding feldman international harvester kentucky highland russell car snow plow fixing minimum prices goods interstate commerce constitutional although takes away buyer advantage bargaining market conditions give darby mulford smith rock royal sunshine anthracite coal adkins commission power fix price maximum minimum incidental right think duty choose economic consequences promote retard production also importantly consumption turn assume reduction company revenues warranted come question translating allowed return rates consumers classes consumers commission fixed single rate gas delivered irrespective use despite fact hope established amounts two high one domestic use lower one industrial contracts commission fix two prices interstate gas readily price resale domestic users another resale industrial users pattern hope established contracts commission expressly given jurisdiction certainly act broad enough permit two prices fixed instead one concept interest unduly narrowed commission concept public interest natural gas cases carried today opinion first announced opinion minority pipeline case enumerated two public interest investor interest consumer interest emphasized exclusion others well enough dealing railroads utilities supplying manufactured gas electric power communications service transportation utilization facilities impair future usefulness limitation supply however brings natural gas case another phase public interest mind overrides owner consumer interest producers industrial consumers served immediate private interests expense range public interest public interest course requires stopping unjust enrichment owner also requires stopping unjust impoverishment future generations public interest use hope half million domestic consumers quite different one public interest use baker dozen industries prudent price fixing seems must threshold determine whether part allowed return shall permitted realized sales gas resale industrial use use tend level daily seasonal peaks domestic demand extent permits lower charge domestic service wise way making gas cheaper comparison substitute gas already cheap fuel interstate sales contracts provide times demand great enough gas go around domestic users shall first served operation preference await day actual shortage since propriety preference seems conceded operate prevent coming shortage well mitigate effects industrial use jeopardize tomorrow service householders today however decided cheapen domestic use resort industrial sales limited uses gas special values extend also use cheaper competitive fuels much cheaper trial gas sell domestic gas much advantage competitive fuels industrial gas contribute lowering domestic rates made contribute maximum capable price highest desired volume sales realized answer say household rate lowest fixed commercial conditions conserve supply use lowest probable rate purpose likely speed exhaustion much still high enough induce economy use purpose nearly reached saturation point hand demand industrial gas present rates already appears increasing lower industrial rate merely subsidize industrial consumption speed depletion impact flat reduction rates ordered admittedly increase industrial advantages gas competing fuels increase use think finding commission public interest justification record present discrimination domestic users gas favor industrial users one evils natural gas act aimed congress one evils complained cleveland akron hope revenues cut whole reduction owing domestic users considered wise raise part hope revenues industrial purpose sales utmost possible revenue raised least consumption gas competitive relationships fuels permit industrial price substantially advanced benefit company increased revenues advance applied reduce domestic rates opinion interest requires great volume gas put uneconomic industrial use either saved important future domestic use present domestic user full benefit exchange value reducing present rates course commission power directly regulate extend fixing rates local company shall sell consumers power required accomplish purpose already pointed contract commission altering classifies gas according purposes resold provides differentials two classifications necessary commission order gas supplied paragraph hope contract east ohio company shall stated price fixed give domestic service entire reduction herein reductions may prove possible increasing industrial rates might provide gas delivered paragraph contract industrial purposes industrial customers hope approved writing shall figure might found consistent public interest herein defined late day contend authority regulatory commission extend consideration public interests may directly regulate conditioning orders protection interstate commerce commission railway labor executives lowden whether commission assert apparently broad statutory authorization prices discriminations course affair entitled notion interest judgment policy must prevail however ground thinking views may constrained commission accept method decision particular single formula important rate base appropriate make clear reasons least understood commission free face realistically nature peculiarity resources control foster duration fixing price consider future interests addition investors present consumers return case may accept decline proffered freedom problem presents commission unprecedented opportunity boldly make sound economic considerations instead legal accounting theories foundation federal policy return case commission thereby clearly quit may appear responsibility perpetrating shortsighted pattern natural gas regulation footnotes hope produces annual gas requirements purchases rest contracts five companies east ohio gas peoples natural gas river gas fayette county gas manufacturers light heat co first three companies like hope subsidiaries standard oil east ohio river distribute gas ohio three pennsylvania hope approximate sales may classified follows local west virginia sales east ohio peoples river fayette manufacturers hope natural gas processed hope construction refining affiliate extraction gasoline butane domestic coke another affiliate sells gas hope boiler fuel required minimum reductions per rates previously charged east ohio peoples respectively per rate previously charged fayette manufacturers book reserve interstate plant amounted end amount determined commission proper reserve requirement commission also noted past company transferred amounts aggregating depreciation depletion reserve surplus latter adjustments taken account excess becomes exacted ratepayers amount required cover consumption property service rendered thus keep investment unimpaired page contention based fact single dollar depreciation depletion reserves taken gross operating revenues whose source amounts charged customers past natural gas therefore fact depreciation depletion reserves contributed customers represent investment hope page see railroad commission cumberland tel bonbright valuation property commission noted case usual complexities involved estimate gas reserves geologists company commission presented estimates remaining recoverable gas reserves one per cent apart pages commission utilized determining depreciation depletion reserve requirements used estimates average service lives property classes based part inspection physical condition property studies made hope retirement experience maintenance policies years average service lives various classes property converted depreciation rates applied cost property ascertain portion cost expired rendering service record present case shows hope lookout new sources supply natural gas contemplating extension pipe line louisiana purpose commission recognized fixing rates depreciation much material may used various present sources gas supply exhausted thus giving property scrap value end present use see uniform system accounts prescribed natural gas companies effective january account sec act comes closest supplying definite criteria rate making provides subsection commission may investigate ascertain actual legitimate cost property every company depreciation therein found necessary purposes facts bear determination cost depreciation fair value property subsection provides every company request shall file commission statement cost property shall keep commission informed regarding additions etc recently stated meaning word gathered purpose valuation made thus question valuation rate making much utility allowed earn basic question valuation reorganization purposes much enterprise probability earn institutional investors chicago chief justice hughes said case pages page predictions service life entirely accurate retirements made predictions precisely fulfilled depreciation reserve represent consumption capital cost basis according method spreads loss respective service periods amounts charged operating expenses credited account depreciation reserve excessive extent subscribers telephone service required provide effect capital contributions make good losses incurred utility service rendered thus keep investment unimpaired secure additional plant equipment upon utility expects return see justice brandeis dissenting railways electric west extended analysis problem noted act provides specific rule governing depletion depreciation sec merely commission time time ascertain determine order fix proper adequate rates depreciation amortization several classes property company used useful production transportation sale natural gas see simonton nature interest grantee oil gas lease west penn power board review ch art west virginia suggests possible solution concern value company tangible assets included rate base fair market value gas delivered customers added outlay operating expenses taxes pt ch xii final report federal trade commission senate pursuant sess pt chs xii xiii op supra note see hearings subcommittee house committee interstate foreign commerce sess hearings house committee interstate foreign commerce sess power investigate ascertain legitimate cost property requirement books records control rates depreciation requirements periodic special reports broad powers investigation among chief powers supporting rate making function apart grandfather clause contained provision natural gas company may enlarge extend facilities area determined commission without authorization see approved july stat containing compact conserve oil gas oklahoma texas new mexico illinois colorado kansas pointed amended act february stat require certificates public convenience necessity extensions made markets natural gas already sold another company situations well considerations conservation entered proposal give act broader scope cong pp see annual report federal power commission pp baum federal power commission state utility regulation bill amending originally contained subsection reading follows contained section shall construed affect authority state within natural gas produced authorize require construction extension facilities transportation sale gas within state provided however commission hearing upon complaint upon motion may order forbid intrastate construction extension company shall find prevent company rendering adequate service customers interstate foreign commerce territory already served see hearings house committee interstate foreign commerce pp explanation deletion house committee report stated pp increasingly important problems raised desire several regulate use natural gas produced therein interest consumers within federal power regulate interstate commerce interest interstate intrastate consumers deemed committee warrant intensive study probably retailed comprehensive plan handling thereof provided stricken subsection noted annual operating expenses commission included west virginia federal taxes net increase operating expenses allowed commission increased west virginia property taxes adequacy amounts challenged commission included aggregate annual operating expenses allowed gas purchased also allowed natural gas production exploration development suggested however commission ascertaining cost hope natural gas production plant proceeded contrary provides act shall apply production gathering natural gas valuation like provisions operating expenses essential function customarily performed country cf smith control power rates england annals indeed act gives commission power propriety reasonableness inclusion operating expenses capital surplus delay rentals forms rental compensation unoperated lands leases see note supra commission expressed doubts power fix rates sales industries interstate pipelines distinguished resale industrial customers distributing companies annual report federal power commission sec act provides provisions act shall apply transportation natural gas interstate commerce sale interstate 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 see defining company supra pp characteristic industry recognized prior act requiring inclusion depletion allowance among operating expenses see columbus gas fuel public utilities commission theory natural gas companies suggested emerged cases arising earlier period regulation commission alert problems conservation administration act indeed suggested might wise restrict use natural gas functions rather areas annual report commission stated connection natural gas particularly adapted certain industrial uses added general use gas boilers production steam circumstances questionable social economy ibid argument makes charging rate reasonable gives commission power investigate matter may find necessary proper order determine whether person violated provision act moreover gives commission power investigate determine cost production transportation natural gas cases authority establish rate governing transportation sale natural gas directs commission available several state commissions information reports may assistance state regulation companies discussion points commission see pages natural gas act stat stat commission may investigate ascertain actual legitimate cost property every company depreciation therein found necessary purposes facts bear determination cost depreciation fair value property every company upon request shall file commission inventory part property statement original cost thereof shall keep commission informed regarding cost additions betterments extensions new construction cost variously defined rate making purposes useful sense seems minimum amount necessary create time inquiry modern plant capable rendering equivalent service see bonbright valuation property reproduction cost cost building replica obsolescent plant real significance investment defined may mean sum originally put enterprise either without additional amounts excess earnings reinvested business bookkeeping significance whether commission allows rate return commensurate risk original investment lower rate based current risk capitalization reflecting established earning power successful company probable cost duplicating services cf american latter traditional method judge dobie dissenting pointed majority opinion pipeline case express discussion prudent investment theory concurring opinion contained clear one said difficult believe majority believing otherwise leave statement unchallenged fact two justices matter record books long opposed reproduction cost theory rate bases commented favorably prudent investment theory may influenced conclusion see opinion justice frankfurter driscoll edison light power brief solicitor general case noted however statements made natural gas case electric power important distinction shall try make plain natural gas appalachian field averages content manufactured gas moody manual public utilities youngberg natural gas arnold kemnitzer petroleum possessions id id fredonia new york natural gas conveyed shallow well thirty people lighthouse barcelona harbor near westfield new york time many years afterward lighted gas issued crevice report utility corporations federal trade commission pt year pennsylvania enacted act provide incorporation regulation natural gas companies et seq see steptoe hoffheimer memorandum governor cornwell west virginia west virginia law quarterly see also report utility corporations federal trade commission pt sess arnold kemnitzer petroleum possessions id id see report utility corporations federal trade commission pt sess commonwealth pennsylvania west virginia conditions provoked legislation see west virginia law quarterly people ex rel pavilion natural gas public service commission village falconer pennsylvania gas company state department reports see example public service commission iroquois natural gas misc park abbott realty iroquois natural gas misc public service commission iroquois natural gas people ex rel pennsylvania gas public service commission east ohio gas akron ohio village consolidated gas ohio gress village laramie ohio city jamestown pennsylvania gas see also fuel gas railroad commission new york public service commission said transportation natural gas pipe lines one state another state interstate commerce congress taken regulation particular industry indeed expressly excepted operation interstate commerce commissions law interstate commerce commissions law section quite clear therefore commission require pennsylvania corporation producing gas pennsylvania transport deliver state new york interstate commerce commission likewise powerless exists power seems power vested congress yet exercised available source supply crystal city company present except purchasing porter gas company possible commission might fix price potter gas company sell sold commission require supply gas state new york exercise power fix price power exists merely say sell price keep state lane crystal city gas new york public service comm reports second district proclamation president september rules regulations garfield fuel administrator september example iroquois gas corporation formerly served buffalo new york natural gas ranging per cu mixes gas proportions provide mixed gas per cu space heating water heating charges range cents first per month cents per month moody manual public utilities fuel administration made following cooking value comparisons based tests made department home economics ohio state university natural gas per equivalent coal per ton natural gas per equivalent gasoline per gal natural gas per equivalent electricity per natural gas per equivalent coal oil per gal use conservation natural gas issued fuel administration see brief behalf jof legislation imposing excise tax natural gas submitted mine workers america national coal association brief national gas association mine workers supra note pp compiled bureau mines reports source quoted preceding note spread elsewhere shown state industrial domestic illinois louisiana oklahoma texas alabama georgia corning new york rates initiated crystal city gas company follows first cu per month public service commission rejected rates fixed flat rate per lane crystal city gas new york public service comm reports second district pennsylvania gas company national fuel gas company group also attempted sliding scale rate new york consumers net per month follows first feet second feet third feet eventually abandoned however company present scale pennsylvania appears reversed following net monthly rate first next next moody manual public utilities new york serves mixed gas study effect sliding scale rates reducing consumption see proceedings natural gas association america see report utility corporations federal trade commission doc pt sess four holding company systems control per cent natural gas transmission lines columbia gas electric corporation cities service electric bond share standard oil new jersey columbia alone controls nearly per cent fifteen companies account per cent total report utility corporations federal trade commission doc pt reported governor west virginia per cent total gas production state control eight companies steptoe hoffheimer legislative regulation natural gas supply west virginia west virginia law quarterly three subsidiaries columbia system others subsidiaries larger systems view sales interlocking interests may doubted whether much real competition among companies pattern effects local regulatory efforts observed decisions see fuel gas railroad commission fuel gas public service commission dayton power light public utilities commission columbus gas fuel public utilities commission present case italics supplied throughout paragraph stat sess list east ohio gas company special industrial contracts thus expressly hope control demands follows make fetish mere accounting shield examination deeper causes forces movements conditions govern rates even recording current transactions bookkeeping hardly exact science representation condition trend business uses symbols certainty express values actually constant flux may said commercial investment banking business extending credit success depends knowing believe accounting concerns go bankruptcy reorganization whose books show solvent often even profitable one rely accountancy accurately disclose past current conditions business fallacy using sole guide future price policy apparent however quest certitude ardent pay irrational reverence technique uses symbols certainty even though experience warns us delusive writers ventured challenge american idolatry see hamilton cost standard price law contemporary problems observes apostle put accountancy things men purpose determines character system accounts analyzes hypothetical character accounting says eternal mold pecuniary verities handed high logic algebra device analogy ingenious contrivance human mind serve limited practical purpose far pecuniary expression industrial reality instrument highly selective application service institution money making capital account observes enterprise lusty competition others kind survival thing system accounts focus solvency accordingly depreciation obsolescence factors carry immediate threat matters lesser concern capital account likely regarded secondary phenomenon enterprise public utility continued survival seems assured solvency likely taken granted persistent ingenious attention likely directed much securing upkeep physical property making certain capitalization fails one whit give full recognition every item go account see bonbright valuation property bonbright says vice traditional law lies adoption excessively rigid concepts value rules valuation rather tendency permit shifts meaning inept else judges make openly admit attempt regulate rates reference periodic occasional reappraisal properties tested long enough confirm worst fears critics unless place taken promising scheme rate control days private ownership government regulation may numbered bonbright valuation property east ohio owns natural gas rights acres reserved operated wells moody manual public utilities hope asked certificate convenience necessity lay miles pipeline hugoton gas fields southwest kansas west virginia carry million cu natural gas per day cost estimated moody manual public utilities find little information rates industries record none usual sources moody manual federal power commission touched upon problem conservation connection application certificate permitting construction pipeline southern texas new york city says natural gas act presently drafted enable commission treat fully serious implications problem question raised whether proposed use natural gas result displacing less valuable fuel create hardships industry already supplying market time rapidly depleting country reserves although period perhaps years natural gas priced appear offer apparent saving fuel costs mean simply social costs must eventually paid ignored study entire problem may lead conclusion use natural gas restricted functions rather areas thus especially adapted space water heating urban homes buildings various industrial heat processes require concentration heat flexibility control uniformity results industrial uses appears particularly adapted include treating annealing metals operation kilns ceramic cement lime industries manufacture glass various forms use raw material chemical industry general use natural gas boilers production steam however circumstances questionable social economy twentieth annual report federal power commission