Title: Davenport Water Co. v. Iowa State Commerce Com'n

State: iowa

Issuer: Iowa Supreme Court

Document:

190 N.W.2d 583 (1971) DAVENPORT WATER COMPANY, Appellant, v. IOWA STATE COMMERCE COMMISSION et al., Appellees. No. 54512. Supreme Court of Iowa. September 27, 1971. Rehearing Denied November 8, 1971. *587 Lane & Waterman, Davenport, and Isham, Lincoln & Beale by Charles A. Bane, Chicago, Ill., for appellant. Daniel J. Fay, Des Moines, and Reuben Goldberg and Leo J. Steffen, Jr., Washington, D. C., for appellee Iowa State Commerce Commission. Durwood W. Dircks, Davenport, for appellee City of Davenport. H. T. Lewis, Bettendorf, for appellee City of Bettendorf. RAWLINGS, Justice. Plaintiff public utility takes first impression appeal in this jurisdiction from trial court's affirmance, with one exception, of a water rate order issued by defendant state administrative commission. We affirm in part, reverse in part. Davenport Water Company, a Delaware corporation (Utility), authorized to do business in Iowa, is engaged in providing water service to users in Davenport and Bettendorf (Municipalities). Utility has furnished franchised service in Davenport since 1930 and Bettendorf since 1940. Initially Utility was an Iowa corporation. In 1927 a predecessor to American Water Works Company, Inc. (American), obtained the original entity by stock purchase. In 1930 its properties were acquired by Utility which, in 1947, became a wholly owned subsidiary of American, largest investor owned water works holding corporation in the United States. June 22, 1966, Utility filed with the Iowa State Commerce Commission (Commission), a proposed 50 percent service rate increase (public fire protection excluded) to be effective August 1, 1966. July 18, 1966, Commission ordered suspension of the increase. November 15, 1966, Utility placed the proposed rates in effect under a Commission approved customer refund bond. December 23, 1966, Municipalities intervened in opposition to the Utility proposal. *588 March 1, 1967, Commission ordered hearings to commence April 4, 1967. They were concluded October 12, the same year. The transcript of oral testimony consists of almost 4000 pages. Eighty-four exhibits were also introduced in evidence, comprising another 1000 pages. By Commission's final order, issued October 9, 1968, Utility's proposed rates were held unreasonable. Commission, with one of three members dissenting, accordingly cancelled Utility's proposed rate revision, authorized filing of new schedules providing an annual revenue increase of approximately 23 percent, as best determinable from the record, and directed that Utility submit a customer refund plan as to all collections in excess of Commission authorized rates, plus associated sales taxes, with interest at seven percent per annum. November 4, 1968, Utility appealed to Scott County District Court and obtained a stay order under bond. May 15, 1969, hearing was held on that appeal, absent new or additional evidence. July 23, 1969, district court affirmed Commission on all points, except interest on customer refunds was ordered reduced from seven percent to five percent per annum. Appeal by Utility to this court followed. As a preface to further consideration of this case it is appropriate to here circumscribe some of the basic terms presently involved. "Rate base" represents the total investment in property, used and useful at time of the rate inquiry, in rendering a designated utility service. That figure is multiplied by a percentage called "rate of return" which orthodox regulation allows the utility to earn. See Pacific Telephone and Telegraph Company v. Hill, 229 Or. 437, 365 P.2d 1021, 1024; Application of Northwestern Bell Telephone Co., 78 S.D. 15, 98 N.W.2d 170, 176-177; 43 Am.Jur., Public Utilities and Services, § 82; 51 Iowa L.Rev. 283. The methods most commonly employed in ascertaining a rate base are, (1) "original cost depreciated or prudent investment", (2) "present reproduction cost or fair value." A rate base determined by "original cost depreciated or prudent investment" usually consists of original cost of the property used or useful in rendering services, plus working capital, less accumulated depreciation and contributions to construction and capital. This is ordinarily determined by an analysis of the utility's books and records. See, Hope Natural Gas Co. v. Federal Power Commission, 134 F.2d 287, 300-301 (4 Cir.); 2 Pond, Public Utilities, § 593 (4th ed. 1932); 51 Iowa L.Rev. 283. Under "present reproduction cost or fair value" method the rate base is customarily derived by considering and evaluating original cost of a utility's existing facilities devoted to public service, present reproduction cost new of the facility less depreciation, and the amount and value of outstanding stocks and bonds. In effecting this computation, estimates based in part on price and labor indices, and extant values are commonly put to use. See Smyth v. Ames, 169 U.S. 466, 18 S. Ct. 418, 42 L. Ed. 819; Iowa-Illinois Gas & Electric Co. v. Fort Dodge, 248 Iowa 1201, 1229, 85 N.W.2d 28; 2 Pond, Public Utilities, § 594 (4th ed. 1932); 51 Iowa L.Rev. 284. Commission instantly determined "fair value" testimony offered by Utility was too indefinite, speculative and uncertain to be of any probative force or effect, then applied the "original cost or prudent investment" formula. By so doing it concluded Utility's rate base was $10,237,844, and allowed thereon a return of seven percent or $716,649 annually, with operating expenses, including depreciation and taxes of $1,491,139. The foregoing rate base consisted of $11,589,729 underpreciated original cost of the plant in service December 31, 1966. From this there was deducted $4,861 representing contributions in aid *589 of construction; $6,500 nonutility plant; $102,593 accumulated deferred investment tax credits; $1,237,931 depreciation recorded on Utility's books, adjusted, for acquisition of the Bettendorf property. On appeal to us, Utility contends trial court erroneously affirmed Commission in these respects: 1. Rates allowed in such final judgment and order do not afford Utility a reasonable return upon the fair value of its property devoted to public service, are confiscatory, and cause Utility to be deprived of property without due process of law, in violation of Iowa Const., art. I, § 9. 2. Commission and district court, in adopting and approving a rate base for Utility, rejected all evidence regarding value of Utility's property devoted to public use, and instead employed the so-called investment rate base method, in violation of The Code 1966, Section 490 A. 8. 3. By rejecting all Iowa decisional rate-making precedents, and imposing confiscatory rates in violation of the Constitution and statutes of the State of Iowa, Commission and district court have denied Utility any relief from the debilatory effects of the long-continued and still-continuing inflation in the general economy. District court erred in affirming the following determination by Commission that reproduction cost evidence is per se incompetent: District court erred in affirming the following rulings made by Commission which were arbitrary and capricious or otherwise illegal under § 490 A. 17 of the Iowa Code, because 1. Commission erroneously understated Utility's rate base in these particulars: (a) By denying an appropriate addition to the rate base for the non-income-producing portion of Utility's committed construction program at end of the test year; (b) By excluding from the rate base any allowance for materials and supplies. 2. Commission erroneously overstated the amount of operating income which Utility would receive from rates approved by Commission in the following particulars: (a) By refusing to consider any deduction therefrom for Utility's charitable donations and contributions; (b) By understating the amount of Utility's property taxes to be deducted therefrom through demonstrable error in calculation; (c) By understating Utility's rate case expense to be deducted therefrom by calculating a federal income tax saving resulting from such expense at a higher rate than that found applicable to Utility by Commission; (d) By understating Utility's federal income tax to be deducted therefrom by including as deductible in the computation of said tax the depreciation on property excluded by Commission from the rate base. District court erred in affirming the disallowance by Commission of Utility's deduction for deferred federal income taxes, thereby further overstating operating income *590 which would be produced by the rates approved by Commission. District court erred in affirming Commission's order which required a rate refund for the entire period from November 15, 1966, to October 9, 1968, although Commission, under § 490 A. 6 of the Iowa Code, lacked any rate refund jurisdiction over the period from August 1, 1967, to October 9, 1968, since Commission's power to suspend rates ceases 12 months from the date such rates would have become effective if not suspended. I. Utility RatesLegislative Function. At one time the various municipalities in Iowa were granted exclusive nonadministrative authority to fix local utility rates. The Code 1962, Chapter 397. See Iowa-Illinois Gas & Electric Co. v. Fort Dodge, 248 Iowa 1201, 1227-1228, 85 N.W.2d 28. In 1963 this, as an administrative power, legislative in nature, was delegated to the Iowa State Commerce Commission. Regular Session, Sixtieth General Assembly, Chapter 286, presently identified as The Code 1971, Chapter 490A. See Iowa-Illinois Gas & Electric Co. v. Iowa City, 255 Iowa 1341, 1348, 124 N.W.2d 840; Iowa-Illinois Gas & Electric Co. v. Fort Dodge, supra, 248 Iowa at 1216-1217, 85 N.W.2d 28; Arizona Corporation Commission v. Superior Court, 107 Ariz. 24, 480 P.2d 988, 990-991; Pacific Telephone & Tel. Co. v. Public Utilities Com'n, 62 Cal. 2d 634, 44 Cal. Rptr. 1, 401 P.2d 353, 360; 73 C.J.S. Public Utilities § 16a; 43 Am.Jur., Public Utilities and Services, § 83. See generally Davis, Administrative Law Text, § 5.01; 3 Pond, Public Utilities, §§ 892, 903 (4th ed. 1932); cf. Elk Run Telephone Co. v. General Telephone Co., 160 N.W.2d 311, 314-317 (Iowa). II. Judicial Review. First to be determined is the scope of our review. At the threshold The Code 1966, Section 490 A. 8, provides in material part: "The burden of proof shall be on the public utility to prove that no unreasonable profit is made." This must mean, a presumption of reasonableness attends Commission's determined rate return, and the burden is upon Utility to prove otherwise. As 43 Am.Jur., Public Utilities and Services, § 186, states: See Cedar Rapids Steel Transportation, Inc. v. Iowa State Commerce Commission, 160 N.W.2d 825, 836 (Iowa), cert. den. 394 U.S. 918, 89 S. Ct. 1189, 22 L. Ed. 2d 451; In re New Jersey Power & Light Co., 9 N.J. 498, 89 A.2d 26, 31; Application of Northwestern Bell Telephone Co., 78 S.D. 15, 98 N.W.2d 170, 176; In re Northwestern Bell Telephone Co., 73 S.D. 370, 43 N.W.2d 553, 555-557; 73 C.J.S. Public Utilities § 26; 2 Am.Jur.2d, Administrative Law, § 751; 2 Pond, Public Utilities, §§ 552, 553 (4th ed. 1932); cf. San Diego Land & Town Co. v. City of National City, 174 U.S. 739, 19 S. Ct. 804, 810, 43 L. Ed. 1154; Southwestern Bell Tel. Co. v. State Corp. Com'n, 192 Kan. 39, 386 P.2d 515, 526. *591 And §§ 490A.13-490 A. 16 provide for appeal to the district court by an aggrieved party, with attendant appellate procedures. Then § 490 A. 17 states: Also § 490 A. 19 says: See Elk Run Telephone Co. v. General Telephone Co., 160 N.W.2d 311, 317 (Iowa). "Clearly a review anew is not contemplated." Nishnabotna Valley Rural Elec. Coop. v. Iowa P. & L. Co., 161 N.W.2d 348, 353 (Iowa). In cases such as this our review is akin to those brought before us involving workmen's compensation controversies. Looking now to Merchant v. SMB Stage Lines, 172 N.W.2d 804, 807 (Iowa), this court said: See Southwestern Bell Telephone Co. v. State Corporation Commission, 192 Kan. 39, 386 P.2d 515, 525; 73 C.J.S. Public Administrative Bodies and Procedure § 216b; 2 Am.Jur.2d, Administrative Law, § 657; 43 Am.Jur., Public Utilities and Services, § 229; cf. Ruan Transport Corporation v. Iowa State Commerce Commission, 182 N.W.2d 641, 645-646 (Iowa). Instantly Commission is the finder of fact, it being for us to ultimately determine, (1) issues of law, (2) whether Commission acted unreasonably, arbitrarily, capriciously, in violation of applicable constitutional standards, or in excess of statutory authority, and (3) whether its findings are supported by substantial evidence of record. See Code § 490 A. 17, quoted above. Our limited factual review is as it should be, since Commission presumably *592 has at its disposal the facilities and expertise with which to appropriately resolve detailed and complicated fact questions. This means we can intercede only when Commission is clearly shown to have acted unconstitutionally, in violation of statutory mandate, or absent substantial support in the record. See Penn-Central Merger and N & W Inclusion Cases, 389 U.S. 486, 524, 88 S. Ct. 602, 621, 19 L. Ed. 2d 723; Colorado Interstate Gas Company v. Federal Power Commission, 142 F.2d 943, 954 (10 Cir.); Henderson v. Jennie Edmundson Hospital, 178 N.W.2d 429, 431 (Iowa); Knudsen v. Iowa Liquor Control Commission, 171 N.W.2d 538, 540 (Iowa); Cedar Rapids Steel Transportation, Inc. v. Iowa State Commerce Commission, 160 N.W.2d 825, 831 (Iowa), cert. den. 394 U.S. 918, 89 S. Ct. 1189, 22 L. Ed. 2d 451; Central Maine Power Co. v. Public Utilities Com'n, 150 Me. 257, 109 A.2d 512, 514; Southwestern Bell Telephone Co. v. State Corporation Commission, 192 Kan. 39, 386 P.2d 515, 525; Village of Norwood v. Chicago & N. Ry. Co., 287 Minn. 407, 178 N.W.2d 704, 707-708; 4 Davis, Administrative Law, § 29.02 (1958); 73 C.J.S. Public Administrative Bodies and Procedure § 223; 2 Am.Jur.2d, Administrative Law, § 659. See also National Labor Relations Board v. Brown, 380 U.S. 278, 290-293, 85 S. Ct. 980, 987-989, 13 L. Ed. 2d 839. Furthermore, since Commission's rate fixing power is, as aforesaid, legislative in nature, we have no authority to determine whether it acted wisely in adopting any policy or plan merely because it is or is not to our liking. See In re Permian Basin Area Rate Cases, 390 U.S. 747, 790-792, 88 S. Ct. 1344, 1372-1373, 20 L. Ed. 2d 312; Strong v. Town of Lansing, 179 N.W.2d 365, 367 (Iowa); State v. Social Hygiene, Inc., 261 Iowa 914, 922, 156 N.W.2d 288; Green v. City of Mt. Pleasant, 256 Iowa 1184, 1196, 131 N.W.2d 5; May's Drug Stores v. State Tax Commission, 242 Iowa 319, 327-328, 45 N.W.2d 245; Village of Norwood v. Chicago & N. Ry. Co., supra; Application of Svoboda, 74 S.D. 444, 54 N.W.2d 325, 327; Davis, Administrative Law Text, § 2.16; 73 C.J.S. Public Utilities § 64j (2) at 1161; 2 Am.Jur.2d, Administrative Law, §§ 651-652, 675, 677; cf. Young v. O'Keefe, 248 Iowa 751, 757, 82 N.W.2d 111; Wisconsin Telephone Co. v. Public Service Commission, 232 Wis. 274, 287 N.W. 122, 141-142. Although the fixing of utility rates is a function over which the state, under its police power, has complete control, any determination as to reasonableness thereof is a judicial prerogative over which courts must exercise unyielding control. See 2 Pond, Public Utilities, § 548 (4th ed. 1932). Of course, questions relative to constitutionality of legislation, or action of an administrative agency thereunder, and the interpretation of a legislative enactment stand as law issues determinable by the judiciary alone. See Hubbard v. State, 163 N.W.2d 904, 908 (Iowa); 73 C.J.S. Public Administrative Bodies and Procedure §§ 215, 229, 231; 16 C.J.S. Constitutional Law § 13; 2 Am.Jur.2d, Administrative Law, §§ 656, 676; 16 Am.Jur.2d, Constitutional Law, § 101; cf. Farrell v. State Board of Regents, 179 N.W.2d 533, 537-538 (Iowa). But see 2 Am.Jur.2d, Administrative Law, § 579. In any event, it is not for us to engage in rate fixing, either directly or under the guise of judicial construction. See Code §§ 490A.6-490 A. 8, 490 A. 17; Iowa-Illinois Gas & Electric Co. v. Iowa City, 255 Iowa 1341, 1348, 124 N.W.2d 840; Iowa-Illinois Gas & Electric Co. v. Fort Dodge, 248 Iowa 1201, 1217, 85 N.W.2d 28; Village of Norwood v. Chicago & N. Ry. Co., supra; 1 Davis, Administrative Law, § 5.01 (1958); 3 Pond, Public Utilities, 946 (4th ed. 1932); 73 C.J.S. Public Utilities § 41a; 43 Am.Jur., Public Utilities and Services, § 83. III. Fair ValueState Constitutional Mandate? Utility does not instantly claim Code Ch. 490A, more particularly § 490 A. 8 *593 is, per se, unconstitutional. Rather it asserts, in effect, Commission's use of the "original cost or prudent investment" rate base approach is confiscatory, therefore violative of Iowa Const., art. I, § 9. Basically Utility takes the position Commission's application of "original cost", in itself, constitutes deprivation of property without due process. We cannot agree. Admittedly Utility does not invoke U.S. Const., Amend. 14, § 1. It still remains, however, both constitutional provisions, supra, are to all intents and purposes similarly phrased. Unquestionably, "The Supreme Court of this state must determine the constitutional requirements in Iowa, and is not under any obligation to uphold a state statute merely because in the view of the Supreme Court of the United States it is not unconstitutional." Iowa-Illinois Gas & Electric Co. v. Fort Dodge, 248 Iowa 1201, 1224, 85 N.W.2d 28, 41. Conversely, where as here constitutional provisions contain a similar guaranty, they are usually deemed to be identical in scope, import and purpose. See Farmington River Company v. Town Plan & Zoning Commission, 25 Conn.Sup. 125, 197 A.2d 653, 659; Snyder v. Town of Newtown, 147 Conn. 374, 161 A.2d 770, 774, app. dism. 365 U.S. 299, 81 S. Ct. 692, 5 L. Ed. 2d 688; In re Opinion of the Justices, 246 A.2d 90, 92 (Del.); Anderson v. City of St. Paul, 226 Minn. 186, 32 N.W.2d 538, 541; 16A C.J.S. Constitutional Law § 568 c; 16 Am.Jur.2d, Constitutional Law, § 542. Compare Federal Power Commission v. Natural Gas Pipeline Co., 315 U.S. 575, 582, 62 S. Ct. 736, 741, 86 L. Ed. 1037. Under these circumstances we are not bound by but may look to United States Supreme Court interpretations of the Fourteenth Amendment due process provision for such light and guidance as they may afford. Cf. Hubbard v. State, 163 N.W.2d 904, 909 (Iowa). With this in mind some reference to decisions involving rate fixing under the Fourteenth Amendment is appropriate in determining whether, as an abstract proposition of law, use of the "original cost or prudent investment" approach is per se unconstitutional. An informative analysis of all such cases, starting with Munn v. Illinois, 94 U.S. 113, 24 L. Ed. 77 (1877), to and including Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591, 64 S. Ct. 281, 88 L. Ed. 333 (1944), is set forth in Utah Power & Light Co. v. Public Service Commission, 107 Utah 155, 152 P.2d 542, 546-553. As there disclosed, Smyth v. Ames, 169 U.S. 466, 18 S. Ct. 418, 42 L. Ed. 819 (1898), first fully developed the "fair value" rule as a foundation for establishment of a utility rate base. It was, at least in part, the basis for our judicial assumption of the "fair value" theory in Cedar Rapids Gas Light Co. v. Cedar Rapids, 144 Iowa 426, 120 N.W. 966 (1909), subsequently adhered to in all opinions by this court to and including Iowa Public Service Co. v. Sioux City, 256 Iowa 547, 128 N.W.2d 248 (1964). It should be noted however, all such decisions from 1909 to 1964 were premised upon a review of rates fixed by nonadministrative municipal councils. Demonstrably we said in Iowa-Illinois Gas & Electric Co. v. Fort Dodge, supra, 248 Iowa 1219, 85 N.W.2d 38: See also 248 Iowa 1228, 85 N.W.2d 43; cf. Iowa-Illinois Gas & Electric Co. v. Iowa City, 255 Iowa 1341, 1348-1349, 124 N.W.2d 840. *594 But in Federal Power Commission v. Hope Natural Gas Co., supra, the Supreme Court reversed the Circuit Court of Appeals and upheld a Commission ordered rate base premised solely on "prudent investment" evidence, and in so doing said, at 220 U.S. 601-602, 64 S.Ct. 287-288: Mindful of the foregoing, we are satisfied Iowa Const., art. I, § 9, as it relates to the administrative fixing of utility rates, does not alone preclude use by Commission of the "original cost or prudent investment" standard. That view finds more than minimal support in opinions issued by the Supreme Courts of these states: Arkansas, California, Colorado, Connecticut, Florida, Georgia, Kansas, Louisiana, Maine, Michigan, Mississippi, Nevada, New Hampshire, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming. See citations, 51 Iowa L.Rev. 267, 285-294. IV. Fair ValueStatutory Directive? The question next to be considered is whether Code § 490 A. 8 commands application of the fair value standard. In relevant part that legislative enactment states: "In determining reasonable and just rates, the commission shall consider all factors relating to value and shall not be bound by rate base decisions or rulings made prior to the adoption of this chapter." Utility argues the words "shall consider all factors relating to value" mean, in essence, Commission is by law required to apply or use all evidential factors relating to the "fair value" concept in determining a rate base. We are not so persuaded. The issue here raised compels a construction of that part of the statute last above quoted. Code § 4.1(2) requires, unless inconsistent with the manifest intent of the General Assembly or repugnant to the context of the statute, "Words and phrases shall be construed according to the context and the approved usage of the language; but technical words and phrases, and such others as may have acquired a peculiar and appropriate meaning in law, shall be construed according to such meaning." Furthermore, we have repeatedly held, even under the rule of liberal construction, courts may not extend, enlarge, *595 or otherwise change the terms of a statute, but must seek always for legislative intent by what the legislature said, rather than what it should or might have said. See Radosevich v. City of Ottumwa, 173 N.W.2d 522, 525 (Iowa); Sueppel v. City Council of Iowa City, 257 Iowa 1350, 1354, 136 N.W.2d 523; cf. Young v. O'Keefe, 246 Iowa 1182, 1186-1187, 69 N.W.2d 534. Additionally, the rejection of offered amendments to a legislative act may be considered in determining intent of the legislature. To that end we may resort to legislative journals. See Socony Vacuum Oil Company v. State, 170 N.W.2d 378, 382 (Iowa); Builders Land Co. v. Martens, 255 Iowa 231, 235, 122 N.W.2d 189; Independent School Dist. of Cedar Rapids v. Iowa Emp. Sec. Comm., 237 Iowa 1301, 1308-1309, 25 N.W.2d 491. There is nothing technical or peculiar attending use of the words "consider all factors relating to value" as employed in § 490 A. 8. Black's Law Dictionary, (rev. 4th ed.), at 378, says "consider" means: "To fix the mind on, with a view to careful examination; to examine; to inspect." And 15A C.J.S., at 581, states: Directly on point is this statement in the case of In re New Jersey Power & Light Co., 9 N.J. 498, 89 A.2d 26, 32: *596 See also Ingard v. Barker, 27 Idaho 124, 147 P. 293, 297; United Brotherhood of Carpenters, Etc. v. Industrial Com'n, 363 S.W.2d 82, 90-91 (Mo.App.). An examination of the record before us reveals Commission devoted at least 18 (Record) pages to a "consideration" of Utility's fair value testimony. Trial court also carefully weighed Commission's rate base decision, and in so doing repeated this apt statement found in Southern Bell T. & T. Co. v. Mississippi Pub. Serv. Com'n, 237 Miss. 157, 113 So. 2d 622, 644: Moreover, "value", as the word is used in § 490 A. 8, cannot be reasonably equated with "fair value" as it relates to a utility rate base. Any other holding would require that we read words and meaning into the law not there clearly expressed. If the legislature, in enacting Code § 490 A. 8 had intended to establish "fair value" as a rate base standard it could easily have so stated. In other words, our General Assembly, if so desired, could have said: In determining reasonable and just rates, the Commission shall consider all factors relating to "fair value only", "fair value as a rate base", or words of like import, and then stopped. But that it did not do. See Simms v. Round Valley Light & Power Company, 80 Ariz. 145, 294 P.2d 378, 381; City of Cincinnati v. Public Utilities Commission, 161 Ohio St. 395, 119 N.E.2d 619, 622; Solar Electric Co. v. Pennsylvania Public Utility Commission, 137 Pa.Super. 325, 9 A.2d 447, 456; cf. Utah Power & Light Co. v. Public Service Commission, 107 Utah 155, 152 P.2d 542, 553-558. The reasoning of other appellate courts, pertinent here, illustrates our General Assembly did not mean, by use of the word "value" in Code § 490 A. 8, that Commission be bound to a "fair value" rate base formula. In Southwestern Bell Tel. Co. v. State Corp. Com'n, 192 Kan. 39, 386 P.2d 515, the Kansas Commission adopted an original cost, depreciated, rate base. The company had contended for a "fair value" rate base and presented evidence of "fair value" through use of trended original cost and cost of reproduction new less depreciation, adjusted to reflect present value. The Commission was highly critical of both methods and expounded at length on their shortcomings. The company contended the Commission had a positive duty under the Kansas statute, originally adopted in 1911, to use a fair value rate base. The company relied on Commissioner's report appended to a decision of the Kansas Supreme Court rendered in 1924, and upon the holding in that case. But the court, in Southwestern Bell, supra, rejected "fair value", saying at 386 P.2d 529: After discussing a number of cases, the court observed at page 532: And at page 539 the court said further: Kentucky's statute says, in fixing value of the property the "Commission shall give due consideration to the history and development of the utility and its property, original cost, cost of reproduction as a going concern, capital structure, and other elements of value recognized by the law of the land for rate-making purposes." (Ky.Rev.Stats., Sec. 278.290). The Supreme Court there upheld the Commission's use of an investment rate base. Citizens Tel. Co. v. Public Service Commission, 247 S.W.2d 510 (Ky.). In Michigan, where the law states the Commission "shall consider and give due weight to all lawful elements properly to be considered to enable it to determine the just and reasonable price * * * including * * * reasonable return on the fair value of all property used in the service * * *" (Mich.Comp.Laws Anno., Section 460.557), the Commission has, with court approval, used an investment rate base. E. g., Consumers Power Company, 38 PUR3d 355 (Mich.1961). In gas and telephone cases, the Michigan Commission, with approval of the Supreme Court, has employed a depreciated investment rate base method. E. g., Michigan Bell Tel. Co. v. Michigan Public Service Com'n, 332 Mich. 7, 50 N.W.2d 826, 831-832. Mississippi, by legislative enactment, says the Commission "shall give due consideration to all elements that are generally considered in determining the rate base for rate making purposes" and rates prescribed shall yield a fair rate of return upon the reasonable value of the property (Miss.Code Anno. [1942], Sections 7716-11, 7716-12). Even so, the Supreme Court approved the Commission's consistent use of a net investment rate base and rejection of reproduction cost as lacking in probative value. See United Gas Corp. v. Mississippi Public Service Com'n, 240 Miss. 405, 127 So. 2d 404; Southern Bell T. & *598 T. Co. v. Mississippi Pub. Serv. Com'n, 237 Miss. 157, 113 So. 2d 622, 644, quoted supra. In Southern Bell the Mississippi Commission had admitted evidence on reproduction cost new, but after considering it, concluded the evidence was conjectural, speculative, unrealistic, and unreliable. The agency therefore rejected that evidence and fixed the rate base on original cost less depreciation, which action was affirmed by the court. In New Jersey, where by statute the state utility commission is required to "determine the rate base at the fair value of the property" the Supreme Court of that state sustained use of an investment rate base. See State v. N. J. Bell Tel. Co., 30 N.J. 16, 152 A.2d 35, 42-43, where the court said: New York's highest court, in language particularly pertinent here, approved use of an investment rate base with this statement in New York Telephone Co. v. Public Service Com'n, 309 N.Y. 569, 132 N.E.2d 847, 850: It must also be understood, "value in the commercial or condemnation sense cannot be used for rate making * * *." J. Bauer, Transforming Public Utility Regulation, at 170 (1950). See H. Trachsel, Public Utility Regulation, at 239 (1947); 43 Am.Jur. Public Utilities and Services, § 105. Moreover, when considered in context or relation to other provisions of the same section, and chapter, it is even more *599 evident Utility's argument is without merit. In this regard legislative use of the ensuing phrase in § 490 A. 8 "and shall not be bound by rate base decisions or rulings made prior to the adoption of this chapter" distinctly negates any possible equation of the term "fair value" with the unqualified word "value". Stated otherwise, by the above quoted statutory phrase, our General Assembly explicitly expressed an intention Commission was not bound to use either "fair value" or "original value" as a rate base; that it, as a regulatory administrative agency, was free to legislatively use its expert judgment and in its wisdom disregard any prior decisions of this court attendant upon municipal regulation of utility rates or otherwise. See also Code §§ 490 A. 2, 490 A. 21. This is further evidenced by the fact, our General Assembly rejected several proposed amendments to the Act, one of which would have deleted the provision, Commission "shall not be bound by rate base decisions or rulings made prior to the adoption of this chapter". See Senate Journal, Sixtieth General Assembly, February 7, 1963, pages 195, 196, 198. In light of the foregoing it can only be concluded, Commission and in turn trial court correctly found the legislature did not intend to bind defendant regulatory agency to any single formula or formulae regarding the rate base to be employed. Under existing legislation, and within constitutional limitations, Commission was and is free to adopt any rate base method deemed appropriate for determination of value upon which to fix a return rate. V. Fair ValueJudicial Edict? Utility argues, however, a rate base foundationed on "fair value" is, in this jurisdiction, indelibly impressed upon Iowa Const., art. I, § 9, by judicial fiat. As previously stated, local utility rates were, in Iowa, once fixed by the nonadministrative governing body of each city and town. With that limited utility rate machinery in operation, absent any evaluation or guideline standards, we did judicially prescribe the fair value approach. By so doing this court attempted to establish some degree of uniformity in utility rate fixing within the various municipalities. Essentially we did no more than hold, within the context, (1) fair value was a constitutionally acceptable standard to be employed by all municipalities in each utility rate matter, (2) art. I, § 9, of our Constitution precludes confiscation of property by anything less than a fair return on investment. Even so, a difficult if not impossible task was thereby imposed on our city governments. E. g., Iowa-Illinois Gas & Electric Co. v. Fort Dodge, 248 Iowa 1201, 1227-1228, 85 N.W.2d 28. Some of our early pronouncements on the subject at hand did refer rather freely to due process under the Iowa Constitution. But in Iowa-Illinois Gas & Electric Co. v. Fort Dodge, supra, this court specifically dissipated the idea that "fair value" in utility rate cases was constitutionally mandated, by this statement in 248 Iowa at 1225, 85 N.W.2d at 42; "* * * we do not say that the Constitution of the State of Iowa requires the determination of a fair value rate base, * * *." And in the same case at 1227-1228, 85 N.W.2d at 43-44, is this statement: See Narragansett Electric Company v. Kennelly, 88 R.I. 56, 143 A.2d 709, 717-719; Utah Power & Light Co. v. Public Service Commission, 107 Utah 155, 152 P.2d 542, 553-558. Today intrastate utility rate fixing, a legislative function, is in this state delegated to Commission, assumably having benefit of a highly trained and skilled technical staff of experts. Procedural due process safeguards of hearing, with findings based on substantial evidence, and appellate review are provided. See Elk Run Telephone Co. v. General Telephone Co., 160 N.W.2d 311 (Iowa). Utility's argument to the effect we have judicially held a "fair value" approach, in all utility rate fixing cases, stands forever judicially imprinted upon the due process clause of our state constitution is here and now rejected. VI. Fair Value TestimonyConsideration. Utility also complains because Commission excluded as indefinite, uncertain and speculative Utility's fair value testimony. In that regard Commission's action will not be held to constitute reversible error. This subject has already been briefly touched upon. At risk of repetition we again refer to United Gas Corp. v. Mississippi Public Service Com'n, 240 Miss. 405, 127 So. 2d 404, where the court said at 408-409 in 127 So.2d: Accord, Railroad Commission of Cal. v. Pacific Gas & Electric Co., 302 U.S. 388, 393-401, 58 S. Ct. 334, 338-341, 82 L. Ed. 319; Southwestern Bell Tel. Co. v. State Corp. Com'n, 192 Kan. 39, 386 P.2d 515, 534-535; In re New Jersey Power & Light Co., 9 N.J. 498, 89 A.2d 26, 32-37; cf. *601 Universal Camera Corp. v. National Labor Rel. Bd., 340 U.S. 474, 497, 71 S. Ct. 456, 469, 95 L. Ed. 456; see Wood v. Iowa State Commerce Commission, 253 Iowa 797, 803, 113 N.W.2d 710; Circle Express Company v. Iowa State Commerce Commission, 249 Iowa 651, 653-654, 86 N.W.2d 888; 73 C.J.S. Public Administrative Bodies and Procedure § 126; 2 Am.Jur. 2d Administrative Law, §§ 675, 680. It is to us apparent Commission did "consider" all factors relating to value, but in its reasoned judgment found "fair value" evidence by Utility so lacking in probative value as to be without substance, and trial court approved. There is to us no good cause to interfere with that finding. VII. ObservationsFair Value and Original Cost. Unavoidably interwoven with the issues here presented is the approach employed by an administrative agency, under existing standards, in the initial determination of a rate base. This would appear to compel some further consideration of "original cost or prudent investment" and "fair value or reproduction cost". The many champions of each school have endlessly advanced their respective views, e. g., 2 Priest, Principles of Public Utility Regulation, ch. 4 (1969); 1 Whitten & Wilcox, Valuation of Public Service Corporations, ch. IX (2d ed. 1928); J. Bonbright, Principles of Public Utility Rates, at 276 (1961); H. Trachsel, Public Utility Regulation, at 292 (1947). See also Jacksonville Gas Corp. v. Florida R. R. & Pub. U. Com'n, 50 So. 2d 887, 891-892 (Fla.); Narragansett Electric Company v. Kennelly, 88 R.I. 56, 143 A.2d 709, 717. Actually, it would be both impractical and impossible to instantly attempt anything approaching a review of the many conflicting views on this subject. Resultantly we shall dispense with any more extended exploration of that matter than is essential. Regarding "fair value" the court aptly stated in Market St. Ry. Co. v. Railroad Commission, 324 U.S. 548, 566-567, 65 S. Ct. 770, 779-780, 89 L.Ed. 1171: Also pertinent here is this observation in Federal Power Commission v. Hope Natural Gas Co., supra, 320 U.S. at 601, 64 S.Ct. at 287: "The heart of the matter is that rates cannot be made to depend upon `fair value' when the value of the going enterprise depends on earnings under whatever rates may be anticipated." And in 1 Whitten & Wilcox, Valuation of Public Service Corporations, § 353, at 690 (2d ed. 1928), is this statement: Finally on this subject Professor Priest said in 51 Iowa L.Rev. 283, 305-306: As applied to the case at hand we find no preponderating argument in favor of "fair value or reproduction cost" over "original cost or prudent investment" in the determination of a reasonable and just utility rate base. Commission's decision on this point must stand. VIII. Original CostInflation Factor. We turn now to Utility's argument that adoption by Commission of an "original cost or prudent investment" rate base is per se unreasonable and confiscatory because it does not adequately reflect the results attendant upon inflation. In that regard Nichols, Ruling Principles of Utility Regulation, Rate of Return, ch. 12, at 218 (1955), says: Later, Nichols & Welch, Ruling Principles of Utility Regulation, Rate of Return, Supp.A., ch. 8, at 50 (1964), stated: Then at 52 is this pertinent statement: And in the same publication, ch. 11, at 119-120, is this informative observation: Furthermore, as observed by the same authors, ch. 22, at 313: See also Utah Power & Light Co. v. Public Service Commission, 107 Utah 155, 152 P.2d 542, 564-565; M. Glaeser, Public Utilities in American Capitalism, at 394-402 (1957); C. Phillips, Jr., The Economics of Regulation: Theory and Practice in the Transportation and Public Utility Industries, at 291-297 (1965); J. Bauer, Transforming Public Utility Regulation, at 132, 166-170, (1950); J. Bonbright, Principles of Public Utility Rates, at 266-276 (1961). There is to us no basis upon which to fault "rate of return" as a means by which to offset the economic effect of inflation where "original cost or prudent investment" is employed in establishing a rate base. IX. Rate Return. That brings us to Utility's assertion the return allowed it by Commission, affirmed by trial court, is both (1) constitutionally confiscatory, and (2) statutorily unreasonable. This points up the fact that some text writers and courts hold there is a line of demarcation between these two measuring standards. In so doing they take the position that under due process the rate allowed must be sufficient only to avoid confiscation, but if measured by statute alone it must ordinarily be reasonable and just. The latter patently occupies a zone above the former so far as acceptable yardsticks are concerned. See Nichols, Ruling Principles of Utility Regulation, Rate of Return, ch. 4, at 48 (1955); Nichols & Welch, Ruling Principles of Utility Regulation, Rate of Return, Supp. A., ch. 4, at 20-22 (1964). On the other hand we inferentially equated arbitrary and unreasonable governmental action with denial of due process in May's Drug Stores v. State Tax Commission, 242 Iowa 319, 329-330, 45 N.W.2d 245. See The Code 1971, Section 490 A. 17; In re Northwestern Bell Telephone Co., 73 S.D. 370, 43 N.W.2d 553, 555-557; 16A C.J.S. Constitutional Law § 690 a; 16 Am.Jur.2d, Constitutional Law, § 550. This latter view is also accorded some support by the oft cited case of San Diego Land & Town Co. v. City of National City, 174 U.S. 739, 19 S. Ct. 804, 810, 43 L. Ed. 1154, where the court said: As stated by Nichols & Welch, Ruling Principles of Utility Regulation, Rate of Return, Supp. A., ch. 4, at 19 (1964): See Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591, 603, 64 S. Ct. 281, 288, 88 L. Ed. 333; In re New Jersey Power & Light Co., 9 N.J. 498, 89 A.2d 26, 30-31; Wisconsin Telephone Co. v. Public Service Commission, 232 Wis. 274, 287 N.W. 122, 149; cf. Application of Northwestern Bell Telephone Co., 78 S.D. 15, 98 N.W.2d 170, 175-176; 2 Pond, Public Utilities, §§ 568, 571, 574, 581-583 (4th ed. 1932); 3 Pond, Public Utilities, § 903, at 1802 (4th ed. 1932). Furthermore, it is self-evident a reasonable return to Utility would not be confiscatory. See In re Permian Basin Area Rate Cases, 390 U.S. 747, 770, 88 S. Ct. 1344, 1361, 20 L. Ed. 2d 312; Southern Bell T. & T. Company v. Mississippi Pub. Serv. Com'n, 237 Miss. 157, 113 So. 2d 622, 654-656; cf. Steinberg-Baum & Co. v. Countryman, 247 Iowa 923, 935, 77 N.W.2d 15; 43 Am.Jur., Public Utilities and Services, § 156. In any event Utility has failed to here establish the return allowed it by Commission is either unreasonable or confiscatory. X. Committed Construction. Utility proposed that $453,186 of its projected construction program, substantially completed in 1967, or subsequent to the test year, be included in the rate base. Commission refused that request. It is now argued by Utility, trial court erroneously affirmed this action by Commission. In disallowing that rate base adjustment, Commission stated: Instantly, Utility does not deny costs and revenues must match in a test period. Neither does it dispute validity of the rationale underlying Commission's statement, supra. On the contrary, Mr. Bartlett in testifying for Utility agreed, a test period must have a matching of costs and revenue. But Utility contends this principle was not offended by its proposal to include the aforesaid amount in the 1966 rate base because most of it was invested in 1967, for a purpose which "merely improved existing service to existing customers" and "in no *606 way was productive of revenues". Further Utility argues, if the $453,186 "is not included in the rate base, the Company will earn no return of any kind on this non-revenue-producing investment necessary for proper service to its customers." We are not so persuaded. As was said in Application of Montana-Dakota Utilities Co., 102 N.W.2d 329, 334 (N.D.), affirming the North Dakota Commission's exclusion from the test year rate base of plant additions subsequently placed in service: Also dealing with this subject in Narragansett Electric Company v. Kennelly, 88 R.I. 56, 143 A.2d 709, 721, the court stated: See also 2 Pond, Public Utilities, § 606 (4th ed. 1932), and citations; cf. Application of Northwestern Bell Telephone Co., 78 S.D. 15, 98 N.W.2d 170, 177-180. Commission's exclusion from the rate base of any projected plant construction, not finished and in use during the 1966 test year, deprived Utility of nothing to which it was then lawfully entitled. Trial court correctly affirmed Commission in this regard. XI. Working CapitalOffset. It is next claimed by Utility, trial court erred in affirming Commission's holding to the effect working capital should not be added to the rate base because offset by Utility's constant property tax accruals. On this point Commission, in holding adverse to Utility, stated: For utility rate purposes "working capital" is commonly defined as the amount of capital investors are required to put into a business, over and above investment in plant and intangibles, so as to cover any gap between cash expenditures in production and delivery of the services and collection of revenues from service sales. See 2 Whitten & Wilcox, Valuation of Public Service Corporations, § 780, at 1520 (2d ed. 1928). Instantly Commission held, funds supplied by others than investors, i. e., customers, provided more than enough working capital required by Utility for normal operations. That finding stands as a matter of judgment under existing facts and circumstances. See 2 Whitten & Wilcox, Valuation of Public Service Corporations, § 781, at 1524 (2d ed. 1928). Had Commission held other than it did, Utility's customers would be unreasonably required to pay a return on funds already supplied by them in the form of prepaid taxes. Trial court correctly affirmed Commission on this issue. That holding is amply sustained by Pacific Telephone & Tel. Co. v. Public Utilities Com'n, 62 Cal. 2d 634, 44 Cal. Rptr. 1, 401 P.2d 353, 371; Transcontinental Gas Pipe Line Corporation, 11 F.P.C. 94, 101 (1952); Northern Natural Gas Company, 11 F.P.C. 123, 131 (1952). See 2 Whitten & Wilcox, Valuation of Public Service Corporations, § 781 (2d ed. 1928). XII. Charitable Contributions. Disallowance by Commission of Utility's claimed $3490 charitable contributions, as a rate base expense item, presents another issue for review on this appeal. In support of its position Utility cites Board of Supervisors of Arlington County v. Virginia Electric & Power Co., 196 Va. 1102, 87 S.E.2d 139; Public Service Company of New Hampshire v. State of New Hampshire, 102 N.H. 150, 153 A.2d 801, 809; United Gas Corp. v. Mississippi Public Service Com'n, 240 Miss. 405, 127 So. 2d 404, 416; Southwestern Bell Telephone Co. v. State Corporation Commission, 192 Kan. 39, 386 P.2d 515, 544-545; Vrtjak v. Illinois Bell Telephone Company, 32 PUR 385, 388 (Ill.1959); 1 Priest, Principles of Public Utility Regulation, ch. 3, at 83-87 (1969). Upon the basis thereof Utility argues, Commission's holding constitutes abuse of discretion and trial court therefore erroneously upheld Commission. To the end that this matter be placed in proper perspective, we again quote from Commission's order: That was also essentially the holding in Chesapeake & Potomac Tel. Co. v. Public Service Com'n, 230 Md. 395, 187 A.2d 475, 485, where the court said: Accord, Re Chesapeake & Potomac Telephone Company, 57 PUR3d 1 (D.C.1964); Pacific Telephone & Tel. Co. v. Public Utilities Com'n, 62 Cal. 2d 634, 44 Cal. Rptr. 1, 401 P.2d 353, 374-375; Re Southern New England Telephone Company, 78 PUR3d 504 (Conn.1969); Re Accounting Treatment for Donations, Dues & Lobbying Expenditures, 71 PUR3d 440 (N.Y.1967); Re Mountain States Telephone and Telegraph Company, 78 PUR3d 429 (Utah 1969); Re Cheyenne Light, Fuel & Power Company, 79 PUR3d 80 (Wy.1969). There is to us no apparent basis upon which to hold other than that trial court correctly affirmed Commission on this issue. XIII. Property TaxesExtrapolation. The next question to be resolved relates to Utility's argument, Commission erroneously overstated Utility's operating income by understating property taxes to be deducted therefrom. It stands without question, Utility's legitimate property taxes are deductible from gross operating revenue in order to determine pro forma the income Utility would receive under any rate schedule. Instantly it was essential these taxes be estimated because at end of the test year there had been no assessment for that period. For this reason the known assessment for the preceding year (1965) was applied against book value so as to determine an appropriate ratio between the two. That ratio was then applied to book value at end of the test year (1966). Both Utility and Commission witnesses employed the same procedure. But a dispute ensued. On Utility's books are several items not representing physical property, sometimes referred to as "acquisition adjustments", "plant adjustments" or "write-ups". All parties agree they are not a lawful part of any allocated tax assessment. See The Code 1962, Section 428.24. Here the controversy centers upon Utility's claim of error in procedural application of an arithmetical computation. Stated otherwise, Utility claims Commission's staff witness computed the pro forma assessment by applying the 1965 known assessment to the total property account, including write-ups of $820,919, then excluded same from Utility's plant account at end of the test year, thus effecting an improper pro forma property tax reduction of $35.347 for that period. Commission's staff witness Heithoff testified, Utility's reported book value for *609 1965 tax purposes included the aforesaid "write-ups". And, in determining the ratio of plant book value to taxes for 1965, he used the figures supplied by Utility to taxing authorities. The resulting ratio was found to be 36.9712. Then in effecting the pro forma tax computation for 1966, Mr. Heithoff excluded from book value the erroneously reported 1965 "write-ups". It is, of course understood, for rate fixing purposes, Utility cannot be permitted benefit of credit for more taxes than due at the expense of its customers. Stated otherwise, any attempt to adopt the 1965 tax payment or attendant ratio, per se, as the test year standard would be patently improper. Had Commission's staff witness completely eliminated the aforesaid "writeups" in the 1965 computation and 1966 extrapolation, Utility would have had no premise upon which to effectively complain. But by including the "write-ups" in a determination of the aforesaid 1965 ratio, then omitting same in application of that ratio to the 1966 test year the witness, and in turn Commission, manifestly reached an inaccurate and disproportionate result. Commission's adoption of the foregoing procedure constitutes an arbitrary action, and trial court erred in affirming same. This case must therefore be remanded to Commission for a redetermination, in accord herewith, of the pro forma test year property taxes properly allowable as an operating expense. By virtue of our holding, supra (Division X), Utility's claimed committed construction shall not be included in the aforesaid redetermination of the pro forma 1966 property tax allowance. XIV. Rate Case Expense. Turning now to Utility's instant rate case expenses, Commission allowed $375,000, less income tax savings of 49 percent, or $184,000, making a net expenditure of $191,000 to be amortized over a period of eight years. This amortization factor is not here involved. But Utility says Commission, having previously found Utility is entitled to an income tax allowance of 40 percent, instantly adopts an inconsistent position. In taking that stand, however, Utility overlooks the fact Commission here accepted Utility's book figure of $184,000 income tax savings on rate case attendant expenditures. Thus Utility is hardly in a position to now complain. Since Utility expended the net sum of $191,000 in connection with the instant rate hearing, Commission properly utilized that figure. And there is no inconsistency in Commission's determination that for prospective rate-making purposes Utility's applicable tax is 40 percent merely because the 1965-1966 tax credits were greater. Commission's order is neither unreasonable, arbitrary, nor against the weight of evidence. Trial court properly affirmed Commission on this point. Cf. Ohio Edison Co. v. Public Utilities Commission, 173 Ohio St. 478, 184 N.E.2d 70, 81-82. XV. Depreciation. Utility also contends trial court erred in affirming Commission's holding to the effect Utility was entitled to $414,590 tax deduction for depreciation. Here again that is the figure submitted by Utility and accepted by Commission, except as to projected construction projects heretofore resolved by us adverse to Utility. The result was a net allowance of $405,000 for depreciation. In light of the foregoing, trial court's approval of Commission's order was appropriate and proper. XVI. Income Taxes. Disallowance by Commission of Utility's proposed deduction method for deferred income taxes, affirmed by trial court, presents another controverted issue. *610 Under § 167, Internal Revenue Code, 1954 (26 U.S.C., § 167), a taxpayer holding property for use in trade or business, or for production of income had an optional right to use, for depreciation purposes, any one of these three basic methods: (1) straight line, (2) declining balance, (3) sum of the years digits. Under the "straight line" method, cost of plant is allocated equally to time periods extending over its estimated useful life. Assuming an automobile costs $2000 and its useful life is five years, the depreciation would be $400 each year, or 20 percent annually. Where the "declining balance" method is employed, the annual depreciation rate is applied to cost of property, less accumulated depreciation rather than to gross plant as in the straight line method. Under the Revenue Code, the initial first year rate can be twice that of the straight line. Using the same example, supra, the first year's depreciation would be $800, twice the straight line rate, or 40 percent. In the second year this 40 percent would be applied to depreciated cost of $1200 ($2000 less $800) and the tax deduction for depreciation would be $480. The same procedure would be followed during remainder of the five year life. The "sum of the years digits" method of depreciation involves application to gross plant of the varying rates of depreciation, progressively lower each year over service life of the property. The rate for each year consists of a fraction, the numerator of which is the number of years remaining of the estimated service life, including the current year, the denominator of which is the sum of the numbers representing the total numbers of the remaining life years for each successive 12 month period over the estimated service life. Again using the example of an automobile costing $2000 with a service life of five years, the denominator in the fraction would be the sum of the years digits, i. e., 1, 2, 3, 4, and 5, which makes a total of 15. Thus the first year provision for depreciation would be 5/15, or one-third the cost, or $666. In the secone year it would be 4/15 of the cost, or $534. For each year of life the accrual rate progressively declines. Since § 167 of the Revenue Code allowed liberalized depreciation deductions for tax purposes, Utility has taken advantage thereof, using sum of the years digits method. Despite its elected system of depreciation, Utility proposed to Commission, for rate fixing purposes, Utility be allowed to "normalize" the effect of deferred income taxes, as opposed to application of the "flow-through" concept. 1 Priest, Principles of Public Utility Regulation, ch. 3, at 124 (1969), illustrates the so-called "normalization" and "flow-through" theories in this manner: Commission refused Utility's aforesaid proposal, opting instead to employ the "flow-through" method which recognizes, for rate-making purposes, only Federal income taxes actually paid. In so doing Commission said: With regard to this issue Utility leans rather heavily on Alabama-Tennessee Natural Gas Co., 31 F.P.C. 208 (1964), aff'd sub. nom., Alabama-Tennessee Natural Gas Co. v. Federal Power Com'n, 359 F.2d 318 (5 Cir.), cert. den. 385 U.S. 847, 87 S. Ct. 69, 17 L. Ed. 2d 78, and City of Alton v. Commerce Commission, 19 Ill. 2d 76, 165 N.E.2d 513, 522. It also argues Federal legislation enacted subsequent to date of Commission's order has destroyed all basis for support of deferred Federal income taxes, citing § 441, Federal Tax Reform Act of 1969 (83 Stat. 487 et seq.). For reasons stated, infra, we deem that claim extraneous to the matter at hand. Utility concedes, some regulatory agencies have favored the instant Commission-adopted "flow-through" concept, others the Utility-urged "normalization" approach. The choice appears to be one of policy resting with Commission, not to be disturbed by us absent abuse of discretion. See Alabama-Tennessee Natural Gas Co. v. Federal Power Com'n, supra, 359 F.2d at 330; Cities of Lexington, Etc. Kentucky v. Federal Power Com'n, 295 F.2d 109, 114-115 (4 Cir.). Referring again to the Alabama-Tennessee Natural Gas Co. case, supra, the court there held, in effect, contrary to Utility's apparent interpretation, an agency having jurisdiction may accord consumers the benefit of accelerated depreciation via the "flow-through" approach. See 1 Priest, Principles of Public Utility Regulation, ch. 3, at 125 (1969). As disclosed by the record, Utility will realize a true tax saving by use of "sum of the years digits" method, even if its plant accounts remain stable. But according to the record Utility is in an ever expanding state and there is every prospect of continued growth. We are satisfied Commission did not abuse its discretion in electing to require use by Utility of the "flow-through" treatment of deferred Federal income taxes. That conclusion is substantiated by Alabama-Tennessee Natural Gas Co. v. Federal Power Com'n, and Cities of Lexington, Etc., Kentucky v. Federal Power Com'n, both supra; Cincinnati Gas & Electric Co. v. Public Utilities Com'n, 173 Ohio St. 473, 184 N.E.2d 84, 85-86; see Nichols & Welch, Ruling Principles of Utility Regulation, Rate of Return, Supp. A., at 328-337 (1964). With regard to Utility's invocation of the Federal Tax Reform Act of 1969, cited supra, we accord it no consideration because Commission's order is to be tested on the basis of the record made, including such Federal tax legislation as may have then been in effect. If rate orders were to be tested on the basis of events which may have occurred subsequent to the test year, or since the rate order was issued, there would never be any finality to any such hearing or attendant decision. See Interstate Commerce Commission v. Jersey City, 322 U.S. 503, 514-515, 64 S. Ct. 1129, 1134-1135, 88 L. Ed. 1420; National Labor Relations Board v. Condenser Corp., 128 F.2d 67, 81 (3 Cir.). See also Panhandle Eastern Pipe Line Co. v. Federal Power Com'n, 143 F.2d 488, 498 (8 Cir.), aff'd 324 U.S. 635, 65 S. Ct. 821, 89 L. Ed. 1241. Trial court correctly approved Commission's order directing application of the *612 "flow-through" approach with regard to income tax treatment of Utility's plant depreciation. XVII. Refund Order. Finally, Utility asserts Commission erroneously ordered a customer refund of all service charges made by Utility subsequent to November 15, 1966, in excess of rates adjudged by Commission to be reasonable, and trial court erred in affirming that directive. This problem focuses upon certain legislative enactments. Code § 490 A. 1 states, in part: More to the point is § 490 A. 6, which says, to the extent here relevant: Utility contends, that part of § 490 A. 6 quoted above, limiting Commission's rate suspension power to twelve months is applicable and alone determinative. We do not agree. The italicized portion of that Act, supra, both negates Utility's claim, and by the same token supports Commission's instantly challenged action. Adoption of the view favored by Utility would permit it an unjust enrichment at *613 customer expense by retention of funds collected, though adjudged excessive and unreasonable. That is to us illogical and unreasonable. See Larsen v. Pottawattamie County, 173 N.W.2d 579, 581 (Iowa). Utility's June 22, 1966, program, effective proposed date August 1st, was ordered suspended by Commission July 18, 1966. But the matter did not end there. Rather, Utility elected to proceed with the collection of its proposed rates under a Commission approved bond, "conditioned upon the refund in a manner to be prescribed by such Commission (Iowa State Commerce Commission) of any amounts collected thereunder in excess of the amounts which would have been collected under the schedule of rates finally approved by such Commission." (Emphasis supplied). It is at once apparent, (1) this bond provision and Code § 490 A. 6, quoted supra, are alike, (2) Commission instantly directed Utility to do nothing other than refund any excessive rates collected as required by law and in accord with its agreement. Cf. Application of Montana-Dakota Utilities Co., 111 N.W.2d 705, 708-709 (N.D.). Authorities cited by Utility in support of its stand are either distinguishable or nonpersuasive. Trial court's approval of Commission's order on this issue, and reduction of interest attendant on refunds to be made from seven percent to five percent, stands affirmed. XVIII. We have already noted Commission was justified under this record in rejecting the fair value evidence introduced by Utility. In doing so Commission clearly announced its "philosophy" that fair value evidence should not be relied on in future rate-making cases. We repudiate this gratuitous declaration. Commission is obligated to consider such evidence under Code section 490 A. 8. Whether it should then be accepted and applied as having probative force is not to be determined in advance as a policy decision. It is rather a matter to be decided by Commission as the fact finder in each case as the circumstances dictate. XIX. The contentions Utility raises here attacking Commission's findings, conclusions and order, were examined and considered in some detail by trial court. We have in turn reviewed those findings and conclusions in light of the record and now hold, upon the issues instantly presented, Commission's action, findings and conclusions, except as elseways determined in Division XIII hereof, are neither, (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, nor (2) contrary to constitutional right, power, privilege or immunity, nor (3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right, nor (4) unsupported by substantial evidence in view of the entire record as submitted. Trial court is accordingly affirmed in part, reversed in part, and this matter remanded to defendant, Iowa State Commerce Commission, for further proceedings in accord with Division XIII hereof. Costs on this appeal are taxed to plaintiff, Davenport Water Company. Affirmed in part, reversed in part, and remanded to defendant Commission with instructions. All Justices concur, except REYNOLDSON, STUART and REES, JJ., dissent. REYNOLDSON, Justice (dissenting). The majority opinion rightly states our task in this litigation is to determine whether the Commission acted in violation of applicable constitutional standards; unreasonably, arbitrarily, or capriciously; or in excess of statutory authority. We approach the case from the standpoint of these considerations. I. Applicable constitutional standards. In Iowa-Illinois Gas & Electric Co. v. Fort *614 Dodge, 248 Iowa 1201, 85 N.W.2d 28 (1957) this court examined in depth the application of Iowa constitutional provisions to the utility rate problem. The holding in Fort Dodge was reaffirmed in our subsequent rate case opinions. Iowa-Illinois Gas and Electric Company v. Iowa City, 255 Iowa 1341, 124 N.W.2d 840 (1963); Iowa Public Service Company v. Sioux City, 256 Iowa 547, 128 N.W.2d 248 (1964). The unanimous decision in Fort Dodge is cited in the majority opinion and, with divergent interpretations, by both parties to this litigation. No constitutional amendments in this area have been enacted since that case was filed, and it thus remains as an authoritative interpretation of the impact of Iowa constitutional guarantees on the process of rate regulation in Iowa. Did Fort Dodge involve a constitutional question, and if so, how was it answered? The holding in any opinion is frequently best determined by identifying the issues which were presented to the court. The allegations of plaintiff utility's petition are in part set out in the decision (248 Iowa at 1217, 85 N.W.2d at 37) : The thrust of the utility's propositions on appeal constituted a complaint of inadequate weight allocation to reproduction cost. One of the propositions relied on by the defendant city on cross-appeal was, The issues before it as defined by this court in Fort Dodge were stated in the opinion, 248 Iowa at 1219, 85 N.W.2d at 38: What the court there held is this: the rate to be applied must take into consideration those factors which affect the present value of the property devoted to public use. (248 Iowa at 1227, 85 N.W.2d at 43) The decision further makes clear beyond dispute the property is to be valued at the time of the test period. The word "present" is adjectively employed to describe the property "value" sought to be ascertained and this expression appears at least 15 times in the body of the Fort Dodge opinion, i. e. "present value", "fair present value", "present fair value". We may agree with the defendants and the majority Fort Dodge does not mandate the use of reproduction cost to determine present value. However, we did say the constitution required there be at some time a recognition of the present value of the property to avoid confiscation. (248 Iowa at 1222-1223, 85 N.W.2d at 40) We there indicated in the hands of qualified experts price indices and the application of trended percentages to original cost might supply the factor usually furnished by consideration of reproduction costs. We further held "original cost depreciated" is not a valid test except in a period of fairly constant dollar values "almost unknown in this generation" and we prophetically observed "[w]ith the high government debt and other spiraling costs, new values seem to be well established for some time to come." (248 Iowa at 1238, 85 N.W.2d at 49). Fourteen years later, today's conditions insistently compel application of the constitutional safeguards laid down in Fort Dodge. In that case and in many other rate cases we did not merely hold our constitution precluded confiscation of property by anything less than a fair return on investment, as stated by the majority. If that were true, original cost less book depreciation would have been approved by this court in Fort Dodge, this being the measure of that utility's investment. The opposite was true: we held our constitution required a fair return on the present value of the property. The logic of that reasoning is simply illustrated. If the state, even in the absence of constitutional provisions specifically governing condemnation, were to legislate the sole basis of damages for property to be condemned was to be the original cost less book depreciation, all would concede a violation of the Iowa Constitution, Art. I, § 9 (deprivation of property without due process). Similarly, we believe the State of Iowa cannot, without violating due process, legislatively restrict the income from identical property by using a rate base grounded solely on original cost less book depreciation. The majority opinion quotes extensively from and relies for authority on Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591, 64 S. Ct. 281, 88 L. Ed. 333 (1944). That case, which appeared to adopt an "end result" concept of rate fixing, was decided before Fort Dodge and was extensively analyzed and rejected by us in the latter opinion as faultily reasoned. We said it was not binding on us in construing the Iowa Constitution. Even a cursory inspection of the record in this case, the Order of the Commission, and the trial court's ruling, forces the conclusion Commission and trial court repudiated the constitutional mandate laid down in Fort Dodge: the rate base adopted must give effect to inflationary or deflationary changes occurring after original costs incurred. That other jurisdictions, interpreting other constitutions, may reach the Hope case result should not deter us from maintaining our steadfast adherence to our own constitutional safeguards as construed by this court. In so doing, we continue pitching our tent in the cantonment where we have always sheltered and in the company of many jurisdictions holding present value may be considered, including most of our neighboring states. See State v. Southern Bell Telephone and Telegraph Company, 274 Ala. 288, 295-298, 148 So. 2d 229, 236, 47 P.U.R.3d 65, 72 (1962); Application of Wilmington Suburban Water Corporation, 203 A.2d 817, 825 (Del.Super.1964), modified by State Supreme Court at 211 A.2d 602 (1964) (with same position in regard to "fair value" meaning "present fair value"). See also 26 Del.C. §§ 126, 155; Illinois Bell Telephone Company v. Illinois Commerce Commission, 414 Ill. 275, 290-291, 111 N.E.2d 329, 336-338, 98 P.U.R. (n. s.) 379, 389-390 (1953); Public Service Commission v. City of Indianapolis, 235 Ind. 70, 95, 131 N.E.2d 308, 315 (1956); Chesapeake and Potomac Telephone Company of Maryland v. Public Service Commission, 230 Md. 395, 187 A.2d 475 (1963); Minneapolis Street Railway Company v. City of Minneapolis, 251 Minn. 43, 71-72, 86 N.W.2d 657, 676 (1957); State v. Tri-State Telephone and Telegraph Company, 204 Minn. 516, 284 N.W. 294, 301 *616 (1939); State ex rel. Dyer v. Public Service Commission, 341 S.W.2d 795, 798-799, 37 P.U.R.3d 507, 511-512 (Mo.1961); State ex rel. Olsen v. Public Service Commission, 131 Mont. 272, 276-277, 309 P.2d 1035, 1038-1039 (1957); approved in Cascade County Consumers Association v. Public Service Commission, 144 Mont. 169, 196, 394 P.2d 856, 874 (1964); Application of Skeedee Independent Telephone Company, 166 Neb. 49, 54-55, 87 N.W.2d 715, 719, 23 P.U.R.3d 471, 475 (1958); State Corporation Commission v. Mountain States Telephone and Telegraph Company, 58 N.M. 260, 276, 270 P.2d 685 (1954) interpreting N.M.Stat.Ann. § 68-5-14; State ex rel. North Carolina Utilities Commission v. Piedmont Natural Gas Company, 254 N.C. 536, 550, 119 S.E.2d 469, 479 (1961). See also G.S. North Carolina § 62-133 and State ex rel. Utilities Commission v. Lee Telephone Company, 263 N.C. 702, 140 S.E.2d 319, 323-324 (1965); Ohio Edison Company v. Public Utility Commission, 173 Ohio St. 478, 485, 184 N.E.2d 70, 76, 45 P.U.R.3d 1, 7 (1962) interpreting Ohio Revised Code § 4909.15; Scranton Steam Heat Company v. Pennsylvania Public Utility Commission, 405 Pa. 397, 402, 176 A.2d 86, 88-89 (1962); Railroad Commission v. Houston Natural Gas Corporation, 155 Tex. 502, 522, 525, 289 S.W.2d 559, 571, 573 (1956). The present value of the property not the remaining balance of the company's original investment of otherera dollars is the constitutional foundation upon which rate base must be developed in Iowa. As this case comes before us with rate restrictions imposed in violation of applicable constitutional standards, it should be reversed and remanded. II. Commission's conduct as unreasonable, arbitrary or capricious. It was obvious from the outset the Commission and its staff intended to overthrow the constitutional standards Fort Dodge mandated in developing a rate base. The Commission later criticized relatively inconsequential items in reproduction cost, actual depreciation, and obsolescence deduction evidence developed by experts for the utility. At the hearing, however, the position of the Commission staff was made obvious by the objection urged to testimony of plaintiff's reproduction cost experts, whose qualifications in the field were not questioned. The objection urged, "reproduction cost is not in any circumstance a relevant, material or competent factor of value * * *. The end result is what will determine whether the rates fixed by this Commission are just and reasonable * *". In Fort Dodge we noted reproduction cost less actual depreciation and obsolescence necessarily involved estimates and judgmental decisions. But we approved the method there and in later decisions as one logically employed in combination with original cost depreciated to reflect spiraling costs and to arrive at present value of the property. The concept of reproduction cost less actual depreciation and obsolescence is well known in this and in other areas of our law. The Iowa legislature gave it statutory recognition in § 441.21(1) (b), Code, 1971 as a means of arriving at property actual value where such value could not be readily established in another way: "The assessor may consider * * * its cost, physical and functional depreciation and obsolescence and replacement cost * *". Reproduction or replacement cost reduced by factors of physical depreciation and functional depreciation has been recognized as a means of arriving at actual value in tax assessment cases. Dull v. County Board of Review, Plymouth County, 260 Iowa 828, 150 N.W.2d 91 (1967); Chicago & N. W. Ry. Co. v. Iowa State Tax Com'n, 257 Iowa 1359, 137 N.W.2d 246 (1965); Deere Manufacturing Company v. Zeiner, 247 Iowa 1364, 78 N.W.2d 527 (1956). The reproduction cost method is accepted in our insurance law as a factor in arriving at the value of property which has no recognized market value. In Britven v. Occidental Ins. Co., San Francisco, Cal., 234 Iowa 682, 13 N.W.2d 791 (1944), we collected many decisions supporting the following statement, *617 "These and other authorities recognize that the principal factors in determining the actual value of a building are usually the original cost, the cost of replacing it, and a proper allowance for depreciation from use, age and other like causes." (234 Iowa at 687, 13 N.W.2d at 794). See also Group Von Graupen v. Employers Mutual Fire Ins. Co., 259 F. Supp. 934 (D.P.R. 1966). Similarly, theoretical reproduction or reconstruction cost has been approved by this court and other authority as competent evidence in the field of tort where damages result from property destruction, State v. Urbanek, 177 N.W.2d 14 (Iowa 1970); Restatement of Torts, § 911 (1939); and in condemnation awards, 4 Nichols, Eminent Domain, § 15.41(3), p. 819-820 (3d ed. 1962). We thus reach the issue whether basic and settled rules of evidentiary law long recognized by our decisions can be summarily rejected, now and in the future, by an "expert" Commission. The intent and purpose of the majority of the Commission is made evident by the language of the order. "This case * * * marks the Commission's first formal opportunity to state its philosophy which governs the exercise of its rate-making authority * * *. The Commission recognizes that the utilities must have * * * revenues * * * to enable them to pay a reasonable return on their stockholders' investments. * * * The staff advocates that the Commission adopt the so-called `prudent investment' or `net investment' rate base method as being the most reasonable means of determining value for rate-making purposes. * * * Under the investment rate base method, the rate base usually consists of the original cost of the property devoted to public service (i. e., the cost to the first person devoting the property to public service) less accumulated depreciation and contributions in aid of construction plus working capital * * *. [T]he legislature has authorized us to choose the rate base method to be employed in Iowa * * *. [W]e find and determine that reproduction cost is not probative evidence of value and is, therefore, not a factor * * * this Commission is required to consider * * *. [T]he `fair value' method is unsound, its results unreliable, and * * * is unduly time-consuming and expensive. * * * [W]e are not merely dealing with deficiencies and defects that can be cured and a probative result secured. The deficiencies and defects of reproduction costs are inherent in such appraisals and render them and the `fair value' method which depends on them, unworkable and unsound." (Record Vol. I, part 1, pp. 44-66, emphasis supplied). It is not apparent why the Commission, which now condemns reproduction cost as wasteful of time and money, did not under its rule making power (§ 490 A. 2, Code, 1971) promulgate its philosophy so the same could be subjected to prior judicial review. Still more obscure is Commission's reasoning that the reproduction cost method, held in Fort Dodge and subsequent decisions to be competent evidence when rate regulation was the responsibility of novices at the municipal level, now becomes too complex for Commission's professional experts. Laying these inquiries aside, we consider the question of the reasonableness of Commission's approach to rate regulation. If in any other economic context we were to say to the owner of functioning and productive property he was not entitled to derive income from it for the sole reason its cost was depreciated out on his books, the unreasonableness of our edict would be obvious. Carried to its logical conclusion, this is the ultimate effect of the "net investment" rate base method adopted by Commission. It does not suffice to say present value of a functioning plant cannot be ascertained because it is affected by rate manipulations of the regulatory body. This was the circular reasoning of the Hope case, *618 supra, quoted and relied on by the majority. It is another way of stating the income from property will affect its market value. But in the rate base field no one contends market value per se is the measureall concede, for example, no factor of "going enterprise" or good will can be considered. This should not preclude a determination, based on sound judgment and reason, of the present valuethe present intrinsic worthof productive property by the same means value of property is ascertained in all of the other law areas (tax, insurance, tort, condemnation) where no market value is ascertainable. The rejection of these concepts, in the light of the failure of the Commission to consider or apply any other factors to measure the strident facts of inflation or present value of these facilities, was unreasonable, arbitrary and capricious and we should so hold. III. Commission's conduct in excess of statutory authority. We agree with majority our duty is to determine whether the Commission acted in excess of statutory authority. Section 490 A. 8 relevantly provides: In first construing this legislation two basic rules apply. It is a cardinal principle a statute should be interpreted in such a way as to avoid any doubt as to its constitutionality. Jacobs v. Miller, 253 Iowa 213, 111 N.W.2d 673 (1961); Kerr v. Chilton, 249 Iowa 1159, 91 N.W.2d 579 (1958); Gilchrist v. Bierring, 234 Iowa 899, 14 N.W.2d 724 (1944). The second principle provides when any rule of law has become established, a new statute dealing with the same subject matter, if capable of more than one construction, will be interpreted consistently with the established law. 82 C.J.S. Statutes, § 362, p. 794; 50 Am.Jur., Statutes, § 340, p. 333. Turning to the statute, the direction that the Commission shall consider all factors relating to "value" must indicate a valuation, among other things, of the "facilities" referred to in the same section. It seems clear the legislature was here enacting a standard beyond the mere requirement for a "reasonable and just" rate to define the boundaries of commission authority. The Montana Supreme Court, faced with the construction of analogous statutory provisions, has said: We indicated in Division I the due process clause of the Iowa Constitution as construed by this court requires the rate base to be foundationed on present value of the property. This is also the interpretation given our prior case law by authorities in the field. Professor of Law Clarence M. Updegraff, in his article "`Present Value' The Iowa Rate Base for Public Utilities The Recent Fort Dodge Decision", 43 Iowa L.Rev. 317, said at pages 333-334: A. J. C. Priest (Law Professor, University of Virginia), quoted extensively by the majority, criticized the original cost less depreciation rate base as not permitting appropriate accommodation for steadily expanding inflation. But more pertinently, he commented on chapter 490A, Code, 1971, as affected by this court's construction of our constitution: Under principles of statutory construction defined above, and the mandate of our Constitution, "value" as used in § 490 A. 8 must be interpreted to signify the present value of the property or facilities devoted by the utility to public use. Only by this construction is the statute constitutional. The Commission in the case before us made no pretext of incorporating in its rate base any concept of present value of utility's property. It does not equate its cost depreciated with value. Here is the testimony of Martin Toscan Bennett, consulting engineer and industrial economist, the Commission's expert witness: We adopt the Commission expert's definitions ignored by the Commission. The Commission's approach is to compute original cost less depreciation and the result is "value". Is cost the same as value because this Commission says it is? Admittedly, words are quicksilver slippery, but we are irresistably reminded of a literary analogy: Carroll, Through the Looking Glass, The Annotated Alice, 669 (1960) The majority opinion reasons if the legislature meant "fair value" in § 490 A. 8 it would have so stated, and not merely used the word "value". Two observations are pertinent here. At no place in the section do the words "investment" or "original cost" appear, and these are the cornerstones of majority's rationale. Second, we need not refer to "actual value", "fair value", or "present value". We need only to consider the word which was used"value"and note its common dictionary definition, "the monetary worth of a thing." Neither the Commission nor the majority contends the relationship between depreciated *620 original cost and the monetary worth of a thing is more than coincidental. When the Commission assumes the posture depreciated original cost is the only factor to be used in determining value, it is not only acting unreasonably, arbitrarily and capriciously as we have said above, but in excess of statutory authority. The legislature which by this act authorized the Commission to employ "professionally trained engineers, accountants, attorneys, and skilled examiners and inspectors" will, we suggest, be surprised to find the Commission adopting as its value measure a rate base which could be computed by any knowledgeable mathematician. Obviously this was not the legislative intent. The clause in § 490 A. 8, "shall not be bound by rate base decisions or rulings made prior to the adoption of this chapter", logically means the Commission is not bound by any prior decision or ruling with regard to percentage weights to be given original cost vis-a-vis reproduction cost, or reproduction costs per se if other reasonable indices or trending factors can be expertly formulated to convert ancient original cost depreciated to present value of the property. Insofar as they are constitutionally grounded, Fort Dodge and our prior rate base decisions requiring a rate base incorporating present value of the property, cannot be overruled by statute. 16 C.J.S. Constitutional Law, § 13, p. 65; 16 Am.Jur. 2d, Constitutional Law, § 58, p. 230. As the majority so aptly puts it, "questions relative to constitutionality of legislation * * * stand as law issues determinable by the judiciary alone." In so stating, we do not intimate we believe the legislature intended to overrule those decisions. Rather, we believe this legislation was enacted with full knowledge of the requirements of the Iowa Constitution as interpreted by this court. The Commission made no attempt to arrive at the present value of the property and in its action thus violated the legislative standard. It acted in excess of its statutory authority. Stated conversely, Commission did not "consider all factors relating to value"and the legislature, by the use of that language, surely did not intend to give the Commission carte blanche to consider and reject value-affecting factors. In summary, a reading of the record reveals Commission rejected reproduction cost evidence which had probative force as a factor affecting value. The truth of the matter is this was done not because of fatal defects in utility's evidence per se but because the Commission adopted the original cost depreciated method. That method, which makes no pretense of deriving present value of facilities of the utility, does not meet the constitutional test mandated by Fort Dodge. The effect of the majority opinion and its language is unfortunately fourfold. First, it merely puts Commission on notice that what it has done here will not necessarily be tolerated again. Second, it deprives plaintiff utility of its constitutional right to earn income based on present value of its property. Third, it leaves this arena in a state of chaos in which neither the utilities nor the Commission will know how to chart the course of future rate litigation. Lastly, it effectively drains the constitutional life blood from the Fort Dodge decision without the mercy of administering the coup de grace. For the above reasons I respectfully dissent from all that part of the majority opinion contained in Divisions I through IX. I also dissent from Divisions XI (Working CapitalOffset) and Division XII (Charitable Contributions). I concur with respect to Divisions X (Committed Construction), XIII (Property Taxes), XIV (Rate Case Expense), XV (Depreciation), XVI (Income Taxes), and XVII (Refund Order). STUART and REES, JJ., join in this dissent.