PUBLIC UTILITIES-RATE BASE-ALLOWANCE FOR DEPRECIATION

Authors

Abstract

Plaintiff toll bridge company appealed from an order of the Pennsylvania Public Service Commission which set a value for rate-making purposes on their bridge property, constructed in 1924-25, identical to the original valuation order of 1926, for the rate-base as of February 2, 1932. The order allowed a depreciation deduction annually which, with 4 per cent simple interest, would amount to enough to replace the bridge at the end of its estimated period of usefulness. The company claimed the order was confiscatory, as based solely on original cost, without taking into account current cost of reproduction; and that interest should not be included in computing the depreciation allowance. Held, that the valuation of 1926 was a reasonable one at that time, and, upon the ample showing that costs of construction had declined since 1926, was not confiscatory for 1932; and that it was not confiscatory to consider interest in computing the depreciation allowance. Clark's Ferry Bridge Co. v. Public Service Commission of Pennsylvania, 54 Sup. Ct. 427, 78 L. ed. 530 (1934).

Recommended Citation

PUBLIC UTILITIES-RATE BASE-ALLOWANCE FOR DEPRECIATION, 32 Mich. L. Rev. 1167 (1934).
Available at: https://repository.law.umich.edu/mlr/vol32/iss8/16