U.S. Supreme Court UNITED FUEL GAS CO. v. RAILROAD COMMISSION OF KENTUCKY, 278 U.S. 300 (1929)

[Page 278 U.S. 300, 319]

value of the gas rights their book value (after deduction for oil acreage) of $6,343,329, we arrive at a total assumed maximum valuation of appellants' entire property of $44,387,754. Taking 12 per cent. [Footnote 1] of this total or $5,326.530 as the largest amount which could be allocated to the Kentucky business, a return upon it of 14 per cent. (8 per cent. plus 1 1/2 per cent. depreciation, plus 4 1/2 per cent. amortization) would amount to $745,714, an amount less than the actual return.

[Page 278 U.S. 300, 322]

that the rate imposed is confiscatory or otherwise such as to call for the interference of a court of equity.

AFFIRMED.

Mr. Justice McREYNOLDS concurs in the result. Footnotes

Footnote 1 Various witnesses allocated to the Kentucky regulated business an amount of property used for 'production' (including the gas field) varying from 7.1 per cent. to 10.49 per cent. and a percentage of property other than 'production' ranging from 9 per cent. to 12.07 per cent.-or for the entire property as a unit, from 8.4 per cent. to 11 per cent. No witness testified that there was a composite percentage which could be taken generally to represent the part of appellants' entire property used in the regulated business, regardless of the varying values assigned to different items of property. Appellants have used this last figure, 11 per cent., in their calculations, and do not contest its validity. This percentage appears to include some property located in Kentucky but not actually used in the local regulated business. In our own computation, we have, for convenience, taken 12 per cent. as the highest possible percentage applicable and as the figure most favorable to appellants.