Duquesne Light Co. v. Barasch, 488 U.S. 299 (1989)
In Duquesne Light Co. v.
Does the exclusion of abandoned investment costs from ratemaking calculations by a state utility commission constitute an unconstitutional taking or a denial of due process under the Fifth and Fourteenth Amendments?
The judicial review of ratemaking decisions requires examining whether rates allow the utility to operate successfully, while also considering the interests and the rights of consumers. Rates set by public utilities must not cause confiscatory impact violating due process.
The Supreme Court held that the PPUC's decision to disallow recovery of investment costs for the canceled project did not constitute an unconstitutional taking or violation of due process, as it did not lead to confiscatory rates.
Law students gain insight into the balance of state regulatory authority and constitutional scrutiny in economic regulations. This case illustrates the limited scope of judicial review and the deference typically granted to agency expertise in complex economic matters. Duquesne Light Co. v. Barasch affirms that as long as overall rates provide reasonable returns, exclusion of specific costs may not rise to a constitutional violation. This case is often cited in discussions of administrative law, providing an example of the substantial hurdles faced by utilities challenging agency decisions on constitutional grounds.