Opinion ID: 428522
Heading Depth: 2
Heading Rank: 1

Heading: aggregate versus specific reasonableness

Text: Determining whether rates are set at a lawful level starts with the problem of ensuring that in the aggregate the approved rates give the company a reasonable opportunity to cover its operating costs and have enough left over with which to attract capital. This problem has been dealt with earlier .... [The present] section focuses on the criteria by which individual rates can be adjudged just and reasonable. 6 If it were otherwise, the Commission would in every Sec. 206 proceeding seeking adjustment of particular wholesale rates (as opposed to adjustment of overall rate of return) have to make two price squeeze determinations: not merely the price squeeze determination on the basis of the proposed new rates, in order to ascertain (according to petitioners) their justness and reasonableness, see Cities of Batavia, supra, but also a price squeeze determination on the basis of the existing rates, before the Commission could set them aside as unjust and unreasonable 7 The omission of the additional terms not unduly discriminatory or preferential in the requirements for new rates was not accidental. It traces back to the Interstate Commerce Act, where it reflected a congressional intent that the ratemaking agency was not to take an active role in establishing the relative level of rates among ratepayers, as opposed to assuring the compensatory level of rates. See, e.g., 40 Cong.Rec. 1766 (1906). While that original congressional understanding has undoubtedly changed over the years, we do not think it proper to deprive the difference in requirements of all meaning