Opinion ID: 1735794
Heading Depth: 1
Heading Rank: 2

Heading: What is a proper rate of return to be allowed the Company?

Text: The basic law in this state prescribing the rates to which a utility is entitled is contained in § 52, Tit. 48, Code 1940, as amended by Act No. 89, appvd. June 14, 1949, Acts 1949, p. 113, which provides, in pertinent part, as follows: The rates and charges for the services rendered and required shall be reasonable and just to both the utility and the public. Every utility shall be entitled to such just and reasonable rates as will enable it at all times to fully perform its duties to the public and will, under honest, efficient and economical management, earn a fair net return on the reasonable value of its property devoted to the public service. In any determination of the commission as to what constitutes such a fair return, the commission shall give due consideration, among other things, to the requirements of the business with respect to the utility under consideration, and the necessity, under honest, efficient and economical management of such utility, of enlarging plants, facilities and equipment of the utility under consideration, in order to provide that portion of the public served thereby with adequate service.    The heart of § 52 is the provision that a utility is entitled to earn a fair net return on the reasonable value of its property. Our primary concern on this appeal is with the meaning of the phrase reasonable value.