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Prudent Investment Theory in Public Utility Rate Making.

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This article demonstrates the importance of prudent investment theory in rate regulation, indicating its advantages over fair-value doctrine.

The article aims to argue for the adoption of prudent investment theory in public utility rate making, asserting that fair-value doctrine is inadequate.
Analysis of the fair-value doctrine's limitations
Discussion of the prudent investment approach benefits
Reference to Supreme Court decisions influencing rate regulation
Prudent investment theory is deemed more just for consumers and utilities than fair-value doctrine.
The fair-value doctrine is considered outdated and impractical.
The article asserts that past Supreme Court decisions have shaped current regulatory practices.

Charles A. Smith (1946) studied this question.

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This article demonstrates the importance of prudent investment theory in rate regulation, indicating its advantages over fair-value doctrine.