Lincoln Gas & Elec. Light Co. v. Lincoln
Annotate this Case
223 U.S. 349 (1912)
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U.S. Supreme Court
Lincoln Gas & Elec. Light Co. v. Lincoln, 223 U.S. 349 (1912)
Lincoln Gas & Electric Light Company v. City of Lincoln
Argued December 6, 7, 1911
Decided February 19, 1912
223 U.S. 349
Every legislative rate case presents three questions of prime importance: reasonable value of the plant; probable effect of the reduced rate upon future net income; deductions from gross receipts as a fund to preserve plant from depreciation.
A legislative rate for a public service corporation is presumed to be sufficient to produce a fair return on the plant, and the burden of showing that it is confiscatory rests upon those attacking it.
A public service corporation is entitled to a fair return upon the fair value of the plant at the time of the inquiry as to reasonableness of rates imposed, San Diego Land & Town Co. v. Jasper, 189 U. S. 439, but in this case, not decided what such a rate would be on a gas and electric plant in Nebraska.
Where a legislative rate contest involves ascertainment by testimony of experts and auditors of valuation of plant, capitalization, gross receipts, net earnings, depreciation, and other elements, the proper practice is to refer the case at the outset to a skilled master, upon whose report specific errors can be assigned and ruled upon. Chicago, Milwaukee & St. Paul Railway v. Tompkins, 176 U. S. 167.
What sum should be annually deducted from gross or net receipts of a public service corporation for depreciation and replacement and how it should be applied are novel and grave problems, and, in the absence of a full report as to every element involved, this Court is not justified in passing upon them.
The operation of an ordinance establishing a rate for gas will not be enjoined unless complainant enters into a bond to account to consumers for all overcharges in case the ordinance is eventually sustained.
The facts, which involve the validity of an ordinance of the City of Lincoln, Nebraska, regulating charges for gas furnished to consumers, are stated in the opinion.