dissenting:
This case demonstrates the importance of leaving well enough alone. In 1982, Jersey Central Power & Light challenged the Federal Energy Regulatory Commission’s refusal to allow the utility to include in its electricity rate base the carrying charges on its investment in a cancelled nuclear power plant. After a full hearing and careful consideration of the record, we unanimously affirmed the Commission. See Jersey Central Power & Light Co. v. FERC, 730 F.2d 816 (D.C.Cir.1984).
*1506Our reasoning was essentially that FERC’s decision was made pursuant to a valid, established Commission policy against allowing a utility to collect a return on the unamortized portion of an investment in an abandoned project. See New England Power Co., 8 F.E.R.C.Rep. (CCH) ¶ 61,054 (July 19, 1979), aff'd sub nom. NEPCO Municipal Rate Committee v. FERC, 668 F.2d 1327 (D.C.Cir.1981), cert. denied, 457 U.S. 1117, 102 S.Ct. 2928, 73 L.Ed.2d 1329 (1982). We noted that the Supreme Court “long ago upheld the general principle underlying this policy — namely, that utilities are not entitled to have included in their rate base properties not ‘used and useful’ in providing service to ratepayers.” 730 F.2d at 819 (citing, inter alia, Denver Union Stock Yard Co. v. United States, 304 U.S. 470, 475, 58 S.Ct. 990, 994, 82 L.Ed. 1469 (1938)).
Jersey Central argued that the Commission’s action prevented the utility from paying dividends on its common stock and hampered its ability to attract long-term capital, but we concluded that such consequences did not require FERC to alter or waive its general policy, and hence did not entitle Jersey Central to an administrative hearing. See United States v. Storer Broadcasting Co., 351 U.S. 192, 205, 76 S.Ct. 763, 771, 100 L.Ed. 1081 (1956) (agency need not give hearing to party requesting treatment contrary to established agency policy unless the party’s allegations would warrant a departure from the general rule); accord, FPC v. Texaco, 377 U.S. 33, 39, 84 S.Ct. 1105, 1109, 12 L.Ed.2d 112 (1964).
Nothing has changed since we decided this case last year, except that a majority of the panel has changed its mind. After further reflection, the majority has now concluded that Jersey Central did make out a case for special treatment after all. The argument first rejected and now accepted by the court is that the challenged rate order violates the “end result” doctrine of FPC v. Hope Natural Gas Co., 320 U.S. 591, 64 S.Ct. 281, 88 L.Ed. 333 (1944), by denying Jersey City “a fair rate of return.” Maj. op. at 1503.
I believe that in reversing ourselves we have taken a giant step backward. Our initial resolution of this case may have been imprecise in minor respects, but it was basically sound. In contrast, today’s decision profoundly misconstrues Hope Natural Gas and revives a thoroughly discredited theory of judicial review. Accordingly, I dissent.
I.
To appreciate fully the retrogressive nature of today’s decision, it is helpful to place it in historical context. Although the “end result” doctrine upon which the majority relies so heavily received its classic articulation in FPC v. Hope Natural Gas Co., 320 U.S. 591, 64 S.Ct. 281, 88 L.Ed. 333 (1944), the doctrine actually had its origins two years earlier in FPC v. Natural Gas Pipeline Co., 315 U.S. 575, 62 S.Ct. 736, 86 L.Ed. 1037 (1942), the first Supreme Court decision interpreting the Natural Gas Act. For several decades prior to Natural Gas Pipeline, the Court had reviewed rate making decisions with an eye to ensuring that investors received “a fair return upon the value” of their property. Smyth v. Ames, 169 U.S. 466, 546-47, 18 S.Ct. 418, 433-34, 42 L.Ed. 819 (1898). The “fair value” test announced in Smyth had itself been a sharp departure from the more traditional understanding that courts were not to second-guess prices fixed by the legislature, see, e.g., Munn v. Illinois, 94 U.S. 113, 4 Otto 113, 24 L.Ed. 77 (1877); Peik v. Chicago & N.W. Ry. Co., 94 U.S. 164, 4 Otto 164, 24 L.Ed. 97 (1877), and that, in particular, investors in regulated companies had no vested right to financial success, see Covington & Lexington Turnpike Rd. Co. v. Sandford, 164 U.S. 578, 17 S.Ct. 198, 41 L.Ed. 560 (1896). Writing for the Court in Sandford, Justice Harlan explained that the investor’s interest in earning a profit must be balanced by the legislature against the public’s interest in paying fair rates: “It cannot be said that a corporation is entitled, as of right, and without reference to the interests of the public, to realize a *1507given per cent on its capital stock____ The public cannot properly be subjected to unreasonable rates in order simply that stockholders may earn dividends.” Id. at 596, 17 S.Ct. at 205.
The abandonment of these principles of judicial restraint in Smyth v. Ames presaged the Court’s growing willingness and determination in the early years of the twentieth century to test all exercises of regulatory power against the justices’ own understanding of what was “fair, reasonable and appropriate.” Lochner v. New York, 198 U.S. 45, 56, 25 S.Ct. 539, 543, 49 L.Ed. 937 (1905). Just as the Court reviewed rate making decisions to protect what it saw as the “fair value” of the investors’ property, so it scrutinized labor laws, for example, to protect its notion of workplace liberty, see, e.g., Coppage v. Kansas, 236 U.S. 1, 35 S.Ct. 240, 59 L.Ed. 441 (1915) (striking down ban on “yellow dog” contracts) Adkins v. Childrens’ Hospital, 261 U.S. 525, 43 S.Ct. 394, 67 L.Ed. 785 (1923) (invalidating minimum wage law); Lochner (striking down limitation on hours of work), and examined consumer protection legislation to safeguard its conception of market freedom, see, e.g., Weaver v. Palmer Bros., 270 U.S. 402, 46 S.Ct. 320, 70 L.Ed. 654 (1926) (striking down statutory standards for bedding materials); Jay Burns Baking Co. v. Bryan, 264 U.S. 504, 44 S.Ct. 412, 68 L.Ed. 813 (1924) (invalidating legislative standardization of bread loaf weights). See generally L. Tribe, American Constitutional Law §§ 8-1 to 8-4 (1978) (discussing “the Lochner era”). New now count these decisions among the Court’s most sagacious.
As the century progressed, the Court grew to recognize the folly of attempting to establish itself as a “super-legislature,” New State Ice Co. v. Liebmann, 285 U.S. 262, 300, 52 S.Ct. 371, 383, 76 L.Ed. 747 (1932) (Brandeis, J., dissenting), and, by the time the Natural Gas Act was passed in 1938, the justices had largely ceased to question the practical wisdom underlying congressional exercises of the police power. See, e.g., United States v. Carotene Products Co., 304 U.S. 144, 58 S.Ct. 778, 82 L.Ed. 1234 (1938); NLRB v. Jones & Laughlin Steel Co., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893 (1937); West Coast Hotel v. Parrish, 300 U.S. 379, 57 S.Ct. 578, 81 L.Ed. 703 (1937). When the Court adjudicated its first rate dispute under the Act, it therefore needed barely a page to reject a facial challenge to the constitutionality of federal regulation of gas rates. See FPC v. Natural Gas Pipeline Co., 315 U.S. 575, 582-83, 62 S.Ct. 736, 741-42, 86 L.Ed. 1037 (1942). More importantly, the Court in the same decision made clear that its review of rates set by the Federal Power Commission was sharply limited. Chief Justice Stone’s remarks for the Court on this score were as follows:
Section 5(a) [of the Natural Gas Act] directs the Commission to “determine the just and reasonable rate” to be observed, and requires the Commission to “fix the same by order.” It also provides that “the Commission may order a decrease where existing rates are unjust ... unlawful, or are not the lowest reasonable rates.” On review of the Commission’s order by a Circuit Court of Appeals as authorized by § 19(b), the Commission’s findings of fact “if supported by substantial evidence, shall be conclusive.”
By long standing usage in the field of rate regulation, the “lowest reasonable rate” is one which is not confiscatory in the constitutional sense. Assuming that there is a zone of reasonableness within which the Commission is free to fix a rate varying in amount and higher than a confiscatory rate, the Commission is also free under § 5(a) to decrease any rate which is not the “lowest reasonable rate.” It follows that the Congressional standard prescribed by this statute coincides with that of the Constitution, and that the courts are without authority under the statute to set aside as too low any “reasonable rate” adopted by the Commission which is consistent with constitutional requirements.
The Constitution does not bind rate-making bodies to the service of any single formula or combination of formulas. *1508Agencies to whom this legislative power has been delegated are free, within the ambit of their statutory authority, to make the pragmatic adjustments which may be called for by particular circumstances. Once a fair hearing has been given, proper findings made and other statutory requirements satisfied, the courts cannot intervene in the absence of a clear showing that the limits of due process have been overstepped. If the Commission’s order, as applied to the facts before it and viewed in its entirety, produces no arbitrary result, our inquiry is at an end.
Id. at 585-86, 62 S.Ct. at 742-43 (citations omitted).
Quite clearly, the Court emphasized the “result” of the rate making proceeding in order to underscore the limited scope of judicial review: if the end product is demonstrably within the “zone of reasonableness,” there is no occasion for a reviewing court even to consider the Commission’s methodology. Chief Justice Stone's opinion gave no hint that the end result of a rate making determination must satisfy some test of reasonableness beyond the constitutional prohibition against uncompensated confiscation and the general statutory requirement of reasoned decision-making. Indeed, the Court expressly noted that “regulation does not insure that the business shall produce net revenues.” Id. at 590, 62 S.Ct. at 745.
Nonetheless, three members of the Court were concerned that the majority opinion might be read to sanction, once again, intrusive judicial review of the reasonableness of rates. Concurring separately, Justices Black, Douglas, and Murphy worried that the language quoted above might give “renewed vitality to ... [t]he doctrine which makes of ‘due process’ an unlimited grant to courts to approve or reject policies selected by legislatures in accordance with the judges’ notion of reasonableness.” Id. at 601, 62 S.Ct. at 750. In particular, the concurring justices feared that the Court’s focus on the result of rate making might be understood to revive the Smyth v. Ames litmus test for appropriate rates:
While the opinion of the Court erases much which has been written in rate cases during the last half century, we think this an appropriate occasion to lay the ghost of Smyth v. Ames, 169 U.S. 466 [18 S.Ct. 418, 42 L.Ed. 819], which has haunted utility regulation since 1898. That is especially desirable lest the reference by the majority to “constitutional requirements” and to “the limits of due process” be deemed to perpetuate the fallacious “fair value” theory of rate making in the limited judicial review provided by the [Natural Gas] Act.
Id. at 602, 62 S.Ct. at 750 (Black, Douglas & Murphy, JJ., concurring).
By all appearances, the decision in FPC v. Hope Natural Gas Co., 320 U.S. 591 [64 S.Ct. 281, 88 L.Ed. 333] (1944), laid those worries to rest. In a majority opinion authored by Justice Douglas, and in which Justices Black and Murphy concurred, the Court reiterated that “regulation does not insure that the business shall produce net revenues,” id. at 603 [64 S.Ct. at 288], and it explicitly rejected the notion that rates must be set so as to allow investors a rate of return deemed “fair” by the judiciary. Determining a fair rate of return, the majority observed, is part and parcel of the legislative and administrative task of rate making:
The fixing of prices, like other applications of the police power, may reduce the value of the property being regulated. But the fact that the value is reduced does not mean that the regulation is invalid. It does, however, indicate that “fair value” is the end product of the process of rate-making and not the starting point____ The heart of the matter is that rates cannot be made to depend upon “fair value” when the value of the going enterprise depends on earning under whatever rates may be anticipated.
Id. at 601, 62 S.Ct. at 750 (citations omitted).
More significantly, the Court in Hope Natural Gas restated the “end result” *1509analysis of Natural Gas Pipeline in terms making even plainer that the test as intended not as a limit on rate making, but rather as a restraint on judicial review.
We held in Federal Power Commission v. Natural Gas Pipeline Co. ... that the Commission was not bound to the use of any single formula or combination of formulae in determining rates. Its rate-making function, moreover, involves the making of “pragmatic adjustments.” And when the Commission’s order is challenged in the courts, the question is whether that order “viewed in its entirety” meets the requirements of the Act. Under the statutory standard of “just and reasonable” it is the result reached not the method employed which is controlling. It is not theory but the impact of the rate order which counts. If the total effect of the rate order cannot be said to be unjust and unreasonable, judicial inquiry under the Act is at an end. The fact that the method employed to reach that result may contain infirmities is not then important.
Id. at 602, 62 S.Ct. at 750 (citations omitted).
The majority in Hope Natural Gas recognized that “the investor has a legitimate concern with the financial integrity of the company whose rates are being regulated.” Id. at 603, 62 S.Ct. at 751. The Court stopped far short, however, of elevating the investor’s “concern” to a judicially protectable right. Indeed, the majority implicitly acknowledged that under certain conditions the Commission might permissibly set rates higher or lower than what was necessary to provide investors with a competitive rate of return, but declined to speculate on what those conditions were because the rates before the Court fully protected the investors’ interests. Id.
Like Chief Justice Stone in Natural Gas Pipeline, Justice Douglas stressed in his opinion for the Court in Hope Natural Gas that the language and design of the Natural Gas Act were inconsistent with intrusive judicial review of ratemaking fairness: “Congress has provided in § 19(b) that on review of [§ 5] rate orders the findings of ‘finding of the Commission as to the facts, if supported by substantial evidence, shall be conclusive.’ ” 320 U.S. at 600-01, 64 S.Ct. at 286-87; see also Natural Gas Act § 19(b), 15 U.S.C. § 717r.
The “end result” test of Natural Gas Pipeline and Hope Natural Gas thus was never intended as a substantive rule of rate making; the test is rather a threshold limitation on judicial review of legislative and administrative rate determinations. As Justice Jackson explained for a unanimous Court in Market Street Ry. Co. v. R.R. Comm’n, 324 U.S. 548, 65 S.Ct. 770, 89 L.Ed. 1171 (1945):
It was noted in the Hope Natural Gas ease that regulation does not assure that the regulated business make a profit. 320 U.S. at 603 [64 S.Ct. at 288], see Federal Power Commission v. Natural Gas Pipeline Co., 315 U.S. 575, 590 [62 S.Ct. 736, 745, 86 L.Ed. 1037], All that was held was that a company could not complain if the return which was allowed made it possible for the company to operate successfully
Id. at 566, 65 S.Ct. at 779.
Accordingly, the Supreme Court has never applied the Hope Natural Gas doctrine to strike down any administrative or legislative action, although the Court has repeatedly invoked the doctrine in affirming gas rates set by the Federal Power Commission and, later, by FERC. See FERC v. Pennzoil Producing Co., 439 U.S. 508, 518-19, 99 S.Ct. 765, 771-72, 58 L.Ed.2d 773 (1979); FPC v. Texaco, Inc., 417 U.S. 380, 94 S.Ct. 2315, 41 L.Ed.2d 141 (1974); Permian Basin Area Rate Cases, 390 U.S. 747, 88 S.Ct. 1344, 20 L.Ed.2d 312 (1968); FPC v. United Gas Pipe Line Co., 386 U.S. 237, 87 S.Ct. 1003, 18 L.Ed.2d 18 (1967); Wisconsin v. FPC, 373 U.S. 294, 83 S.Ct. 1266, 10 L.Ed.2d 357 (1963); Pennsylvania Water & Power Co. v. FPC, 343 U.S. 414, 72 S.Ct. 843, 96 L.Ed. 1042 (1952); Panhandle Eastern Pipe Line Co. v. FPC, 324 U.S. 635, 65 S.Ct. 821, 89 L.Ed. 1241 (1945); Colorado Interstate Gas Co. v. FPC, 324 U.S. 581, 65 S.Ct. 829, 89 L.Ed. 1206 (1945); *1510Market Street Ry. Co. v. R.R. Comm’n, 324 U.S. 548, 65 S.Ct. 770, 89 L.Ed. 1171 (1945).
In the Permian Basin Area Rate Cases, the Court restated the doctrine of Hope Natural Gas as follows:
Price control is “unconstitutional ... if arbitrary, discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt____” Nonetheless, the just and reasonable standard of the Natural Gas Act “coincides” with the applicable constitutional standards, and any rate selected by the Commission from the broad zone of reasonableness cannot be attacked as confiscatory.
Accordingly, there can be no constitutional objection if the Commission, in its calculation of rates, takes fully into account the various interests which Congress has required it to reconcile.
390 U.S. at 769-70, 88 S.Ct. at 1361-62 (citations omitted). Permian Basin thus reemphasized that the contours of the “zone of reasonableness” limit not rate making power but rather judicial review.
This, then, is the “end result” test as articulated in Hope Natural Gas, and in every other Supreme Court decision applying the test: reasoned rate making determinations cannot be struck down as unjust or unreasonable so long as the end result— the rates themselves — are permissible, and rates are impermissibly low only if they are so arbitrary as to be constitutionally confiscatory. Until today, our decisions have applied this doctrine faithfully. For example, in Farmers Union Central Exchange, Inc. v. FERC, 734 F.2d 1486, 1527 (D.C.Cir.), cert. denied, — U.S. -, 105 S.Ct. 507, 83 L.Ed.2d 398 (1984), we concluded that “the combination of FERC's rate base and rate of return methodologies does not produce an acceptable ‘end result,’ ” only because the rate base and rate of return selected were not rationally related to each other. Similarly, in Washington Light Co. v. Baker, 188 F.2d 11, 16-17 (D.C.Cir.1950), cert. denied, 340 U.S. 952, 71 S.Ct. 572, 95 L.Ed. 686 (1951), we invalidated a rate order of the District of Columbia’s Public Utilities Commission because we found that the Commission had failed to engage in reasoned - decisionmaking. In both cases, we reversed the agency not because we disagreed with the balance it had struck between consumer and investor interests, but rather because we could not discern a coherent path of reasoning leading to the agency’s decision.
We assuredly did not hold in either case that the rates ordered were so unreasonable that they could not be upheld no matter how they were arrived at. Indeed, in Washington Light Gas Co. we expressly recognized the relevance of the PUC’s methodology for judicial assessment of the “end result”:
We think the Commission should keep in mind its obligation to facilitate judicial review of its orders and should assemble a record and make findings which cover all the relevant issues. Unless the Commission tells us what “formula or formulae” it has chosen and makes clear the evidentiary support for its findings under whatever formula adopted, we are handicapped in applying even the limited judicial review left us by the Hope cases.
188 F.2d at 23.
In one respect, our decision in Washington Gas Light Co. may appear to lend support to our decision today, but the appearance is superficial. Although reversing the PUC on other grounds, we affirmed its decision to include an abandoned plant in the Washington Gas Light Company’s rate base. See id. at 17-20. The analogy to Jersey Central’s request is plain. But our approval of the rate base in Washington Gas Light Co. was based squarely on deference to administrative discretion; we held that the Commission was free to depart from the traditional “used and useful” standard of rate base valuation so long as it took into account all relevant interests, including “the extent to which the risk that this particular plant would become obsolete was borne by investors in the past and the extent to which they were compensated for it.” Id. at 20. We certainly did not hold that it would be an *1511abuse of agency discretion — or an unconstitutional taking — for the PUC to adhere to the “used and useful” standard. Indeed, we noted that the rationale for such a standard was “obvious” in cases where a utility claimed that rates were confiscatory: “the company was entitled to ‘just compensation’ only for property which was ‘taken’ for the public service; it could not expect a return (or compensation) for property which could not and would not be ‘taken’ because it was no longer ‘used and useful.’ ” Id. at 18.
II.
Although hedging the point somewhat, the majority appears to acknowledge that FERC’s rate order in this case may be reversed only if the end result — the rates Jersey Central was allowed to change— fall outside the “zone of reasonableness.” See maj. op. at 1502-03. The majority also reads Hope Natural Gas, however, to establish a proposition the Supreme Court has never advanced: that “it does not matter that some of the determinations that go into the making of a rate order are correctly made if the end result is unreasonable.” Id. at 1504.
As I have tried to show in the preceding section, what the Supreme Court has repeatedly reaffirmed is the converse of that statement, namely that the Commission’s methodology is irrelevant if the resulting rate is demonstrably reasonable. “If the total effect of the rate order cannot be said to be unjust and unreasonable, judicial inquiry under the [Natural Gas] Act is at an end. The fact that the method employed to reach that result may contain infirmities is not then important.” Hope Natural Gas, 320 U.S. at 602, 64 S.Ct. at 288. In no way does it follow from that rule that a rate not obviously fair on its face may not be shown to be reasonable by virtue of the manner in which it was determined.
In any event, I do not take the majority to deny that the methodology of rate making may bear on the reasonableness of the result. My impression, in other words, is that the majority accepts the truth, at least in some circumstances, of the Commission’s statement that “the reasonableness of the end result cannot be evaluated without regard to the individual components which comprise a rate.” Jersey Central Power & Light Co., 20 F.E.R.C.Rep. (CCH) ¶ 61,083, at 61,181 (July 23, 1982). The majority’s position appears to be simply that the rates ordered in this case are so low that they fall outside the “zone of reasonableness” no matter how they were set.
That amounts to an assertion that the rates constitute an unconstitutional taking, because, as the majority also seems to recognize, rates are unreasonably low only if they are confiscatory under the fifth amendment. See maj. op. at 1502-03. In a somewhat odd location, the majority states that the end result test “secures” the fifth amendment’s ban on uncompensated takings. See id. at 1505 n. 7. Constitutional prohibitions, of course, do not require legislative enactments such as the Natural Gas Act in order to be binding, and I do not understand the majority to suggest that Hope Natural Gas imposes a substantive floor cn permissible rates higher than that set by the Constitution itself. Rather, I assume the majority means only to repeat what the Supreme Court has made clear: that “the ‘lowest reasonable rate’ is one which is not confiscatory in the constitutional sense.” FPC v. Natural Gas Pipeline Co., 315 U.S. 575, 585, 62 S.Ct. 736, 742, 86 L.Ed. 1037 (1942); accord, Washington Light Co. v. Baker, 188 F.2d 11, 15 (D.C.Cir.1950), cert. denied, 340 U.S. 952, 71 S.Ct. 571, 95 L.Ed. 686 (1951).
A finding that a rate order is constitutionally confiscatory is not to be lightly made. The Supreme Court has repeatedly stressed that price fixing does not effect an uncompensated taking merely because investors are denied their expected return. See, e.g., Permian Basin Area Rate Cases, 390 U.S. 747, 768-69, 88 S.Ct. 1344, 1360-61, 20 L.Ed.2d 312 (1968). Indeed, even in traditionally competitive industries, “[l]oss of future profits — unaccomplished by any physical property restriction — provides a slender reed upon which to rest a takings *1512claim.” Andrus v. Allard, 444 U.S. 51, 66, 100 S.Ct. 318, 62 L.Ed.2d 210 (1979). Nowhere is this principle more firmly established than in the field of utility regulation. As the majority recognizes, “FERC is not chartered to insure utilities against the hazard of not making a profit,” maj. op. at 1503, and “regulation does not insure that the business shall produce net revenues,” id. (quoting Hope Natural Gas, 320 U.S. at 603, 64 S.Ct. at 288; Natural Gas Pipeline, 315 U.S. at 590, 62 S.Ct. at 745). It follows that the rates allowed to Jersey City are not confiscatory, and hence do not fall outside the “zone of reasonableness,” merely because they do not allow the utility to pay dividends to its shareholders.
Despite all these givens, the majority concludes surprisingly that FERC must set Jersey Central’s rates high enough so that the utility can earn a profit. According to the majority, what sets Jersey Central’s petition apart from a garden variety request by a utility for guaranteed profits is the fact that some neighboring utilities charge rates even higher than those proposed by Jersey Central. Id. at 1503. This rationale makes the court’s decision even more remarkable, for it means that implicit in today’s holding is the quiet announcement of a major new federal entitlement. Although regulated corporations have no judicially protectable right to earn net revenues in general, the court apparently holds that they do have a right to earn net revenues if they can earn them at rates lower than those charged by one or more corporations in the same line of business located nearby. And since the end result test coincides with the requirements of the takings clause, the entitlement fashioned today presumably has a constitutional as well as a statutory dimension: it amounts to confiscation, the majority says in essence, for government regulators to prevent a utility from earning a profit if it can do so at rates comparable to rates charged by neighboring utilities.
What is most startling is that the court’s opinion produces this new substantive right virtually out of thin air; the majority just makes it up. It is apparently of no concern to the majority that the Supreme Court has never suggested such a limit on the Commission’s authority; indeed, the majority sees no need to refer to any decision by any court, or even a concurring or dissenting opinion, granting to investors in regulated industries anything like the conditional right to dividends recognized by the court today. Cf. Dronenburg v. Zech, 741 F.2d 1388, 1396 (D.C.Cir.1984) (Bork, J.) (lower federal courts should not “freely create new constitutional rights”).
The majority seems to assume that a rate comparable to those of neighboring utilities necessarily does not exploit customers. Such an assumption might make some sense were there a competitive market for electricity service; in such a case the market rate could be taken as the best measure of what is reasonable. But, of course, there is nothing approaching a competitive market in electricity. We deal here with natural monopolies. Congress has accordingly charged FERC with setting power rates that are “just and reasonable” in light of investor and consumer interests. What rates are “just and reasonable” will in general depend on the utility’s legitimate costs, and those costs can of course vary widely even among neighboring utilities. This dependence and this variation will be present regardless whether rate makers apply the “prudent investment” method favored by the majority, see id. at 1504 n. 4, or the more traditional “used and useful” method, see Jersey Central Power & Light Co. v. FERC, 730 F.2d 816, 819 (D.C.Cir.1984). That some utilities with monopoly markets adjacent to Jersey Central’s are allowed to charge more than Jersey Central thus presumably signifies nothing more than that Jersey Central has access to cheaper sources of power, or for some other reasons has fewer legitimate costs.
The majority’s position seems to be that Jersey Central’s customers can have no valid complaint so long as customers of some neighboring utilities are paying higher rates. But why not? Why should the fortuity that adjacent utilities have high legitimate costs force Jersey Central’s cus*1513tomers to underwrite the carrying cost of Jersey Central’s wholely unproductive investment? It is hard to fathom the majority’s denial that Jersey Central is “asking FERC to guarantee it a profit at the consumers’ expense.” Id. at 1503. Who, exactly, does the majority expect to pay the extra charges on Jersey Central’s bills to its customers? Invisible hands there may be, but they do not write checks.
In the end, the sole basis for the new entitlement fashioned in today’s decision is that it strikes the majority as just. It seems to the majority that FERC, by ordering rates below that charged by neighboring utilities and too low to pay dividends on common stock, has “den[ied] investors a fair rate of return.” Id. at 1503. The majority’s sense of economic fairness may or may not be finely honed; where the court errs fundamentally is in substituting its own sense for that of the Commission. Disregarding decades of instruction that “it is not the function of a court itself to engage in rate making,” FPC v. Colorado Gas Co., 348 U.S. 492, 501, 75 S.Ct. 467, 473, 99 L.Ed. 583 (1955), the majority reads the end result doctrine of Hope Natural Gas and Natural Gas Pipeline as a license to test rate orders against its own notion of what constitutes “a fair rate of return.”
The majority’s sense of economic fairness differs in some details from that expressed in Smyth v. Ames, 169 U.S. 466, 18 S.Ct., 418, 42 L.Ed. 819 (1898). The Smyth Court thought it indisputable, for example, that regulated corporations were entitled to no return on unproductive property like Jersey City’s cancelled nuclear plant. Nonetheless, the theory underlying today’s decision is precisely the theory of Smyth: “the company is entitled to ask ... a fair return upon the value of that which it employs for the public convenience,” id. at 547, 18 S.Ct. at 434. Forty years after the decision in Natural Gas Pipeline, the fears of Justices Black, Douglas and Murphy have thus proven well-founded: the end result test fashioned in that case has been “deemed to perpetuate the fallacious ‘fair value’ theory of rate making in the limited judicial review provided by the [Natural Gas] Act.” 315 U.S. at 602, 62 S.Ct. at 750 (Black, Douglas & Murphy, JJ., concurring). Despite all the majority’s talk about Hope Natural Gas, today’s decision in reality signifies a renaissance of Lochnerstyle substantive due process in ratemaking law; the court today embraces the very decisions Hope Natural Gas attempted to repudiate four decades ago.
III.
The implicit basis of our initial decision in this case was straightforward and sensible: a rate order will not be reversed as unreasonable if it allows a reasonable rate of return on a reasonably defined rate base. Not only is such a result required by the general principles, discussed above, of judicial deference to administrative expertise, but a contrary holding, we noted, “would revolutionize ratemaking” by rendering “superfluous” the very notion of a rate base. Moreover,
[b]ecause the rates set by FERC are primarily challenged by utilities on the grounds that they are “unjust and unreasonable” and therefore do not generate a fair rate of return, forcing the Commission to hold a hearing each time a utility claimed that applying a particular policy would produce an unjust and unreasonable end result would effectively end the “judicially-recognized exception to [a utility’s] statutory right to a Commission hearing ... where the facts are not in dispute and the new tariff contravenes valid and explicit FPC [now FERC] regulations or policy.”
Jersey City Power & Light Co. v. FERC, 730 F.2d 816, 823 (D.C.Cir.1984) (citations omitted).
Our decision may not have identified the grounds for our holding with the degree of precision one would ideally desire. In particular, we may have created unnecessary confusion by stating that the end result test was to be applied in this case “only to those assets which valid Commission rules permit to be included in the rate base.” Id. at 823. That approach was sound for the *1514case before us, since there was no serious contention that either the rate base or the rate of return were arbitrary when considered separately. Our language could perhaps have been misconstrued, though, to preclude the Commission in other cases from using a generous rate of return to compensate for excessively parsimonious rate base determinations, or a low rate of return to balance out an overly inclusive rate base.
Notwithstanding this ambiguity, I see no need for a new opinion in this case. Indeed, even if I harbored some doubt in retrospect that we were correct to affirm the Commission — which, for the reasons explained above, I do not — I would be extremely reluctant to decide this case over again. Despite the tone of Olympian certitude typically adopted in judicial opinions, judging is a human enterprise, and on average judges are probably no less apt than anyone else to question their actions in hindsight. Law differs from some other human endeavors, however, in its inhospitability to constant revision. Legal principles of course evolve over time, but, for a host of familiar reasons, it is important that legal disputes, once settled by the courts, generally stay settled. In the ordinary run of things, judges promote neither justice nor the general welfare by rehearsing old arguments whenever they feel a tinge of uncertainty. Absent exceptional circumstances — and this case, it seems to me, presents none — the time and resources of the courts are better devoted to getting things right the first time.
The majority’s new opinion in this case demonstrates yet another reason for courts to avoid redeciding old controversies: we are as likely to mess things up as we are to straighten things out. We would have had ample opportunity to refine our interpretation of Hope Natural Gas when the next case implicating the end result doctrine arose. If our imprecision threatened to create excessive uncertainty in the interim, there might have been cause to amend our initial opinion. Regardless whether such modification was warranted, however, it would have been far better to leave our initial opinion largely in place, altered or unaltered, than to replace it with the ill-considered and profoundly disruptive decision issued by the court today.
Whatever its minor faults, Judge Bork’s original opinion for the panel correctly identified the crux of this controversy:
This is not a case in which the utility alleges that unjust and unreasonable rates are driving it into bankruptcy. Nor is it a case in which the utility claims that its ability to provide service to its customers is threatened. Jersey Central’s expressed concern is for the well-being of its common equity investors who are paying the carrying charges on the debt and preferred stock. That one may sympathize with their plight does not mean that the Commission acted beyond its authority.
Jersey City, 730 F.2d at 824. This analysis was fully consistent with and faithful to the spirit of Natural Gas Pipeline, Hope Natural Gas, and the many cases recognizing the Commission’s discretion to grant electric utilities a return only on property that is “used and useful.” Today’s decision purports to follow these decisions but ignores their central meaning: courts are not to impose their own sense of economic justice on the rate making decisions Congress has entrusted to the Commission. By disregarding that principle, the majority revives the spectre of a line of cases the Supreme Court wisely laid to rest half a century ago.
For all these reasons, I dissent.