Bluefield Water Works v. Public Service Comm'n
262 U.S. 679 (1923)

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U.S. Supreme Court

Bluefield Water Works v. Public Service Comm'n, 262 U.S. 679 (1923)

Bluefield Water Works & Improvement

Company v. Public Service Commission

No. 256

Argued January 22, 1923

Decided June 11, 1923

262 U.S. 679

Syllabus

1. A judgment of the highest court of a state which upholds an order of a state commission fixing the rates of a public utility company over the objection that the rates are confiscatory and the order hence violative of the Fourteenth Amendment is reviewable here, on the constitutional question, by writ of error. P. 262 U. S. 683.

2. In estimating the value of the property of a public utility corporation as a basis for rate regulation, evidence of present reproduction costs less depreciation must be given consideration. P. 262 U. S. 689. Southwestern Bell Telephone Co. v. Public Service Commission, ante,262 U. S. 276.

3. A public utility corporation challenging as confiscatory rates imposed by a state commission is entitled, under the due process clause of the Fourteenth Amendment, to the independent judgment of the court as to both law and facts. Id.

4. Rates which are not sufficient to yield a reasonable return on the value of the property used at the time it is being used to render the service of the utility to the public are unjust, unreasonable, and confiscatory, and their enforcement deprives the public utility company of its property, in violation of the Fourteenth Amendment. P. 262 U. S. 690.

5. A public utility is entitled to such rates as will permit it to earn a return on the value of the property it employs for the convenience of the public equal to that generally being made at the same time and in the same region of the country on investments

Page 262 U. S. 680

in other business undertakings which are attended by corresponding risks and uncertainties, but it has no constitutional right to profits such as are realized or anticipated in highly profitable enterprises or speculative ventures. P. 262 U. S. 692.

6. The return should be reasonably sufficient to assure confidence in the financial soundness of the utility, and should be adequate, under efficient and economical management, to maintain its credit and enable it to raise the money necessary for the proper discharge of its public duties. Id.

7. A rate of return may be reasonable at one time, and become too high or too low by changes affecting opportunities for investment, the money market, and business conditions generally. Id.

8. In this case, 6% was inadequate to constitute just compensation. P. 262 U. S. 695.

89 W Va. 736 reversed.

Error to a judgment of the Supreme Court of Appeals of West Virginia sustaining an order of a state commission fixing water rates in a suit brought by the plaintiff in error to set the order aside.

Page 262 U. S. 683

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