Court Opinion

ID: 9431507
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:32:27.327579+00
Date Added: 2024-06-11T17:23:28.714634
License: Public Domain

*317Justice Scalia,
with whom
Justice White and Justice O’Connor join, concurring.
I join the Court in reaffirming our established rule that no single ratemaking methodology is mandated by the Constitution, which looks to the consequences a governmental authority produces rather than the techniques it employs. See, e. g., FPC v. Texaco Inc., 417 U. S. 380, 387-390 (1974); Wisconsin v. FPC, 373 U. S. 294, 309 (1963); FPC v. Hope Natural Gas Co., 320 U. S. 591, 602 (1944). I think it important to observe, however, that while “prudent investment” (by which I mean capital reasonably expended to meet the utility’s legal obligation to assure adequate service) need not be taken into account as such in ratemaking formulas, it may need to be taken into account in assessing the constitutionality of the particular consequences produced by those formulas. We cannot determine whether the payments a utility has been allowed to collect constitute a fair return on investment, and thus whether the government’s action is confiscatory, unless we agree upon what the relevant “investment” is. For that purpose, all prudently incurred investment may well have to be counted. As the Court’s opinion describes, that question is not presented in the present suit, which challenges techniques rather than consequences.