The U. S. Supreme Court and utility imprudence

Journal Article · Wed Jan 15 04:00:00 EST 1992 · Fortnightly; (United States)

OSTI ID:7053689

Studness, C M

The Supreme Court on December 9th declined to review the finding by the Louisiana Public Service Commission (LPSC) that $1.4 billion of Gulf States Utilities investment in its River Bend nuclear plant was impurdent. This answers in finality the question of whether the courts will sustain the imprudence disallowances that regulators have made an integral part of rate making since 1985. The refusal to hear the appear has implications that extend far beyond the immediate case. These relate to the risk that investors will carry on utility plant investment and the policies that are appropriate for utility managements to adopt toward new plant investment. Significantly, the River Bend decision will stand as an important precedent since it is a state supreme court decision on a major imprudence finding that the US Supreme Court let stand in the face of a well-reasoned dissent. It gives commissions extraordinary latitude. As long as regulators do not act arbitrarily and capriciously and do not disregard facts egregiously, the courts will defer to their experitise. It is obviously easy for a commission to satisfy these strictures without being deterred from doing what it wishes. Since utilities have little chance of obtaining a finding of confiscation of property by the courts in defense of predatory action by regulators, they are at the mercy of regulators.

• OSTI ID: 7053689
• Journal Information: Fortnightly; (United States), Journal Name: Fortnightly; (United States) Vol. 129:2; ISSN FRTNE8
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
293000 -- Energy Planning & Policy-- Policy
Legislation
& Regulation
296000* -- Energy Planning & Policy-- Electric Power
ELECTRIC UTILITIES
INVESTMENT
LEGAL ASPECTS
MANAGEMENT
PUBLIC UTILITIES
REGULATIONS
STATE GOVERNMENT