(dissenting in part and concurring in part).
My dissent in this case is compelled by my conclusion that the majority, under the guise of restitution, has exceeded its jurisdiction and engaged in prohibited retroactive ratemaking in stretching a valid resti-tutionary award of $738,720 with respect to one invalid rate order, into an award of $2,605,588 that is based upon the alleged invalidity of several valid rate orders whose validity was never attacked by an action. Interest to run on both awards for approximately fifteen years. In my opinion restitutionary awards must be based only on particular rate orders that courts with jurisdiction have declared to be unjust and unreasonable.
I thus dissent to much of Part II of the majority opinion, entitled “Property Issues.” In this Part, the court treats (1) the Commission’s identification of properties converted from operating to non-operating status, (2) the Commission’s computation of the amount of value appreciation of such properties, and (3) the extent to which that amount should be shared by farepayers. My inability to join in this Part of the court’s opinion is based on my conclusion that its calculation of the amount of restitution is largely in conflict with established law. My disagreement springs from two principal sources. First, it is my opinion that the court’s method of calculating restitution is fundamentally flawed. Second, the period of time during which the invalid fares are deemed to have been in effect for the purpose of awarding restitution is in contradiction of the statutory procedures required to invalidate ordered fares and is incorrect. These two objections are treated in turn. Finally, there is a third area in which I differ from the proposed disposition by the majority: the denial of four of five claims made by Transit for equitable adjustment in the amount of restitution to be awarded.
I concur in Parts I and III of the majority opinion dealing, respectively, with the efficiency and viability of D.C. Transit System, Inc. (“Transit”) and the awarding of fees and costs, which correctly state the governing law. Part I affirms the finding of the Washington Metropolitan Area Transit Commission (“Commission”) that Transit was sufficiently viable and efficient in 1970 to be entitled to the benefit of a fare increase.1 In Part III, the court upholds reimbursement of the Commission for its *424expenses in connection with our remand, holds that all other parties must bear their own costs, and defers consideration of petitioners’ applications for attorneys’ fees.
I.Method of Calculating Restitution-Allocation of Gain
It is my conclusion that the majority incorrectly allocates to farepayers the gain on nondepreciable assets when transferred out of service. Such allocation contravenes: the express statutory language of the Washington Metropolitan Area Transit Regulation Compact (the “Compact ”),2 which provided for Transit’s franchise to operate a mass transportation system in the metropolitan area; relevant case law of this and other courts; and traditional principles of public utility regulation. The decision of the majority ignores the principles that: a) depreciable and nondepreciable assets are to be treated differently; and b) investors are entitled to recover a fair rate of return on their risk-incurring investment.
In rejecting the argument that ratepayers were not entitled to share in any portion of the proceeds of the sale of corporate assets unless there was a profit on the depreciable portion of the assets sold, the majority fails to recognize that the Compact itself provided that investors, having undertaken a risk of loss, would be entitled to recover a return on their investment, to-wit:
It is hereby declared as a matter of legislative policy that in order to assure the Metropolitan District of an adequate transportation system operating as private enterprises the carriers therein, in accordance with standards and rules prescribed by the Commission, should be afforded the opportunity of earning such return as to make the carriers attractive investments to private investors. As an incident thereto, the opportunity to earn a return of at least 6% per centum net after all taxes properly chargeable to transportation operations, including but not limited to income taxes, on gross operating revenues, shall not be considered unreasonable.
Compact, at 1040-41. This declaration adopted, nearly verbatim, the language used by Congress in 1956 in the Act granting Transit a franchise to operate a mass transportation system in the Washington metropolitan area. Public Law 757, ch. 669, 70 Stat. 598-99, 49 U.S.C. 27 et seq. (84 Cong., 2d Sess., July 24, 1956) (“Franchise Act"). The Franchise Act contained the additional policy declaration that “Congress will maintain a continuing interest in the welfare of the Corporation and its investors.” 70 Stat. at 599.
In fact, one of the cases cited earlier in this litigation, City of Lexington v. Lexington Water Co., 458 S.W.2d 778 (Ky.1970),3 explicitly rejected any crediting of profits to consumers and held such profits belonged to shareholders. In that decision, the Kentucky Supreme Court held that the risk of capital gain or loss fell on investors’ shoulders, and, in a precise holding, concluded that:
[pjrofit made from the sale of non-depre-ciable land no longer used in serving customers is not an ingredient to be considered in fixing rates. The customers had no interest in the profit realized on the sale — it belonged to the stockholder.
Id. at 780 (emphasis added). This ruling in Lexington Water Co., as we noted in Democratic Central Committee v. Washington Metro. Area Transit Comm’n (“DCC I”), 485 F.2d 786, 797 n. 82 (D.C.Cir.1973), cert. denied, 415 U.S. 935, 94 S.Ct. 1451, 39 L.Ed.2d 493 (1974), explicitly relied on the United States Supreme Court’s emphatic declaration on the risk allocation issue in Board of Pub. Util. Comm’rs v. New York Telephone Co., 271 U.S. 23, 46 S.Ct. 363, 70 L.Ed. 808 (1926):
*425Customers pay for service, not for the property used to render it. Their payments are not contributions to depreciation or other operating expenses or to capital of the company. By paying bills for service they do not acquire any interest, legal or equitable, in the property used for their convenience or in the funds of the company.
Id. at 32, 46 S.Ct. at 266.
New York Telephone has been consistently adhered to. To the same effect is Fed. Power Comm’n v. Hope Natural Gas Co., 320 U.S. 591, 603, 64 S.Ct. 281, 288, 88 L.Ed. 333 (1944) (review of rate orders necessarily requires a “balancing of the investor and the consumer interests”). A few years later, in Washington Gas Light Co. v. Baker, 188 F.2d 11 (D.C.Cir.1950), cert. denied, 340 U.S. 952, 71 S.Ct. 572, 95 L.Ed. 686 (1951), this court articulated a “zone of reasonableness within which rates may properly fall ... bounded at one end by the investor interest against confiscation and at the other by the consumer interest against exorbitant rates.” Id. at 15.4 Recently, this court followed these precedents closely in mandating a “reasonable balancing” of investor and consumer interests in a utility rate dispute. Jersey Central Power & Light Co. v. Fed. Energy Reg. Comm’n, 810 F.2d 1168 (D.C.Cir.1987). The present decision thus appears to represent an abrupt' volte-face, abandoning the principle that allocation of gain on non-depreciable assets will not depend on whether consumer or investor bears the risk. Investors necessarily bear that burden.
It has long been standard practice in utility cases to allocate gain or loss on nondepreciable assets to investors, rather than to consumers, since the concept of obsolescence applies only to depreciable property, not to land.5 Customers have no interest in profits on dispositions of land, since they make no contribution to capital cost and have therefore not reimbursed investors for their capital outlay. Hence, such dispositions are only a concern for investors, and are not an ingredient in rate-making.6
Moreover, as this court conceded in DCC I, the “uniform result” of administrative decisions within the District of Columbia has been to allocate gain on disposition of nondepreciable assets to investors. 485 F.2d at 795. Hence, the present majority not only flouts traditional accounting methods,7 but also rejects the unanimous decisions of expert regulatory agencies that have specifically relied on the Supreme Court’s decision in New York Telephone. The majority opinion thus blazes its own trail, a trail unlikely to be followed by courts more attentive to the principle that reasonable and rational administrative agency decisions will not be overturned simply because a májority of the division feels that equity would be better served by a different disposition, or that they themselves would have reached a different con-*426elusion.8 Under well-established precedents, courts must determine only whether the administrative action was so improper as to fall outside a broad “zone of reasonableness” — so unreasonable as to constitute an abuse of discretion.9 Here, the Commission made a reasonable allocation with respect to nondepreciable assets, and therefore there is no legal basis upon which to overturn it.
Assuming, arguendo, that gain realized on nondepreciable assets should accrue to farepayers, it would still constitute error to order that the invalidity of Order 773 continued beyond the termination date of that order. Rising costs of operation, inflationary pressures, and other socio-economic forces too complex to quantify would have combined to make the fare hikes represented by the post-773 rate orders necessary, inevitable and valid. Indeed, the Commission’s findings accompanying the promulgation of each new rate reflect this fact. Any small difference in Transit’s operating capital resulting from depriving investors of their gain on land would not likely have resulted in the lower fares that the majority seems to assume would have resulted. If these economic realities were not the case, it is difficult to understand why no farepayer contested the increases in rates fixed by the orders which followed Order 773. In this connection, it should be noted that the holding of the majority on the land value appreciation issue constitutes an attack on Orders 773 and 1052 that was never made against the intervening fare orders. See infra Part II.B.
II. The Period for Calculating Restitution
The second — and even more important— area in which, in my opinion, the majority errs, is in its determination of the period that should be covered by the restitution-ary award, i.e., artificial extension of Order 773 beyond its effective period. The majority correctly begins the restitution period with the complete period that Order 773 (invalidated in DCC I) fixed D.C. fares; but then continues that period without interruption far beyond the date that Order 773 was terminated by superseding orders. In this respect, the majority rules that the fare fixed by Order 773 on January 26, 1968 continued, for the purpose of awarding restitution for the next seven years— until January 14, 1973 when Transit was taken over by eminent domain. The effect of such decision is to decide retroactively— some fourteen years after the last fare order — that three successive fare orders issued after Order 773 were invalid, even though a fourth order, Order 1052, was the only one of the superseding fare orders that was challenged by farepayers. This treatment, which assumes the continuing invalidity of the fare increase authorized by Order 773, is erroneous on several grounds. Before demonstrating the soundness of this point and the error of continuing the invalidity beyond the effective date of the order, it is desirable to outline briefly the ratemaking background being dealt with.
A. Background of Rate Orders
Prior to January 26, 1968, basic rates for mass transportation in the District of Columbia had been set at a cash fare of 25 cents and a token fare of four for 98 cents. Transit applied to increase these fares to 30 cents each and four tokens for $1.10. In Order 773, issued January 26, 1968, the Commission rejected this request, but allowed a 2 cent increase, to 27 cents cash fare and four tokens for $1.00.10 In Powell v. WMATC, 485 F.2d 1080 (D.C.Cir.1973), this court substantially affirmed the Order.
However, in DCC I, decided the same day as Powell (June 28, 1973), we reviewed a different aspect of Order 773. In DCC I, the court held that, in promulgating Order *427773, the Commission erred in refusing to allocate to farepayers, as an offset to higher fares, the appreciation in value (the excess of market value over book value) of properties when transferred from operating to non-operating status. We declared Order 773 invalid to that extent, and ordered restitution, in an amount to be determined by the Commission on remand.
Prior to the issuance, in 1973, of our decision in DCC I, however, a number of other superseding rate orders had been promulgated by the Commission. On October 18, 1968, the Commission issued Order No. 882 (unreported), setting rates at 30 cents/cash fare, 261/» cents/token fare (min. purchase of 4). No court challenge was brought against this Order.
On Dec. 23, 1968, the Commission issued Order No. 900 (unreported), setting rates at 30 cents cash fare and 30 cents token fare (minimum purchase of 4). No court challenge was brought against this Order either.
On October 24, 1969, the Commission issued Order No. 984,11 rejecting Transit’s requested rates of 32 cents cash fare, 32 cents token fare as excessive, but declaring Transit entitled to a fare increase nonetheless, with fares to be set at a “just and reasonable level.” No farepayers challenged this Order. Transit, however, petitioned for review. In DC Transit System Inc. v. WMATC, 485 F.2d 881 (D.C.Cir.1973), we held that the Commission had not given proper consideration to the higher labor costs, attributable to increases in the cost of living, which Transit faced. We held Transit entitled to fare increases to the extent such heightened costs made increases necessary, and remanded to the Commission for computation.
Finally, on June 26, 1970, the Commission issued Order No. 1052 (83 P.U.R.3d 1), authorizing Transit to increase its fares to: 40 cents/cash fare, 40 cents/token fare (minimum purchase: four tokens). Fare-payers did challenge this Order and, in Democratic Central Comm. v. Washington Metro Area Transit Comm’n (“DCC II”), 485 F.2d 886 (D.C.Cir.1973), cert. denied, 415 U.S. 935, 94 S.Ct. 1451, 39 L.Ed.2d 493 (1974), we set aside the Order on the ground that the Commission had failed to take into account both the increase in the value of Transit’s land and Transit’s alleged inefficiency. Nevertheless, by June 28, 1973 when our decision in DCC II was rendered, a public authority had already acquired Transit by eminent domain. We therefore remanded to the Commission for computation of the restitution award.
It is only with an understanding of this protracted history that we may compute the restitution due farepayers. In light of the foregoing progression of rate orders, the amount of restitution that should be awarded as compensation should be limited to the excessive fares exacted during the period that Order 773 was in effect, and not — as the majority holds — for fares exacted during periods in which other superseding fare orders, duly promulgated by the Commission, and prima facie valid and never challenged by farepayers, were in operation.12 An examination of the law on retroactive ratemaking demonstrates the particular defects of the computation by the majority.
B. Reasonable Rates and the Prohibition of Retroactive Ratemaking
Part II.C.l. of the majority’s opinion (entitled “Amount of Restitution Available in *428DCC /”)13 rejects Transit’s argument that restitution be limited to $738,720, the aggregate of overcharges collected during the 277 days in which the fare hike allowed by Order 773 was in effect before it was invalidated by DCC I. Despite the fact that Order 773 was superseded by several subsequent fare orders which either were never challenged by any farepayer (Orders 882, 900, and 984) or were authorized by the Commission despite farepayer challenge (Order 1052), the majority adopts the Commission’s recommended restitutionary award of $2,605,588. This sum represents “the fare increment authorized by Order No. 773 over the remainder of Transit’s life as a public utility”14 as though the subsequent unchallenged orders were automatically invalid. And whatever amount is awarded as restitution it would be increased by high interest computed from 1973 — 15 years — a stupendous sum.
The majority argues that Order 773 served as a “base fare” 15 as to which all subsequent rate orders were “incremental.” 16 There is a strong body of statutory and decisional authority arguing against the retroactive ratemaking which the majority’s opinion would create. Neither statutory nor decisional law countenances backward-looking revision of new, effective rates based on a prior judicial invalidation of an earlier rate — retroactive ratemaking. The majority argues that its conclusion “does not disturb any authorization of an additional fare increase following Order No. 773, and thus raises no issue of preclusion or due process....” 17 However, that is exactly what the automatic application of the invalidity of Order 773 to all subsequent unchallenged fare orders, for restitution purposes, does do.
Both statutes and case law provide considerable authority against the “base fare/rate increment” approach which the majority, flouting due process, takes here.
1. Statutes
There are three statutory schemes relevant here, each of which are violated by the majority: (a) D.C.Code Title 43 (the public utility law for the District of Columbia); (b) D.C.Code Title 12 (the relevant statute of limitations); and (c) Public Law 757, Ch. 669, 70 Stat. 598, 49 U.S.C. 27 et seq. (July 24, 1956) (granting a franchise to D.C. Transit System, Inc.).
(a) D.C.Code Title 43.
Several provisions of the District of Columbia Code direct prospective ratemak-ing.
i) D.C.Code § 43-701 (1967) provided:
All public utilities to which an order of the Commission applies shall make such changes in their schedules on file as may be necessary to make the same conform to said order, and no change shall thereafter be made by any public utility in any such rates, tolls, or charges, or in any joint rate or rates, without the approval of the commission. Certified copies of all other orders of the commission shall be delivered to the public utility affected thereby in like manner, and the same shall take effect within such reasonable time thereafter as the commission shall prescribe.
(Codified at D.C.Code § 43-901 (1981) (emphasis added)).
ii) D.C.Code § 43-702 (1967) provided:
The commission may, at any time, upon notice to the public utility and after opportunity to be heard as provided in section 43-410 [now § 43-610], rescind, alter, or amend any order fixing any rate or rates, tolls, charges or schedules, or any other order made by the commission, and certified copies of the same *429shall be served and take effect as herein provided for original orders.
(Codified at D.C.Code § 43-902 (1981) (emphasis added)).
iii) D.C.Code § 43-703 (1967) provided:
All rates, tolls, charges, time and condition of payment thereof, schedules, and joint rates fixed by the commission shall be in force and shall be prima facie reasonable until finally found otherwise in an action brought for that purpose.
(Codified at D.C.Code § 43-903 (1981) (emphasis added)).
This required that an “action [be] brought” to set aside fare orders. Declaring a “rate” invalid without such action is a plain denial of due process.
(b) D.C.Code Title 12 (Limitation of Actions).
In the absence of a more specific statute of limitations, the catch-all provision of the D.C.Code requires that any attack on a rate must be brought within three years. D.C. Code § 12-301 (1981) provides:
Except as otherwise specifically provided by law, actions for the following purposes may not be brought after the expiration of the period specified below from the time the right to maintain the action accrues....
... (8) for which a violation is not otherwise specifically prescribed — three years....
(c) Public Law 757, Ch. 669, 70 Stat. 598, 49 U.S.C. 27 et seq. (84th Cong., 2d Sess., July 24, 1956) (“Franchise Act").
This Act provides:
The initial schedule of rates ... shall continue in effect until August 15, 1957, and thereafter until superseded.... Whenever on or after August 15, 1957, the Corporation files with the Commission a new schedule of rates, such new schedule shall become effective on the tenth day after the date of such filing, unless the Commission suspends the operation of such new schedule.... If the Commission suspends such new schedule it shall immediately give notice of a hearing ... and, after such hearing ... shall determine and by order fix the schedule of rates to be charged by the Corporation. If the Commission does not enter an order, to take effect at or prior to the end of the period of suspension ... the suspended schedule filed by the Corporation may be put into effect by the end of such period, and shall remain in effect until the Commission has issued an appropriate order based on such proceeding.
70 Stat. at 599 (emphasis added). Hence, under the Congressional Act which granted Transit its franchise to operate a mass transportation system in the Washington metropolitan area, fares are presumed to be reasonable upon their effective date, and supersede earlier fares. Moreover, the Compact itself states that, with respect to judicial review of fare orders, “[t]he finding of the Commission as to the facts, if supported by substantial evidence, shall be conclusive.” Compact, 74 Stat. at 1046.
Taken together, these provisions evidence legislative intent to permit only prospective ratemaking, and to bar retroactive ratemaking. They offer a clear statutory direction that rate increases become effective “after” issuance of the Commission orders authorizing them. The majority’s approach would doom the Commission to an unceasing game of catch-up — especially difficult in periods of heavy inflation such as the period in which this litigation arose — in its attempt to achieve a proper rate based on both consumer needs and its own costs. The statute of limitations provision, moreover, compels the conclusion that, since the rate orders issued between Order 773 and Order 1052 were never challenged “in an action” (see D.C.Code § 43-703) by farepayers during the prescribed three year period, each of those orders must be deemed valid for the entire period during which they were in effect. The operation of none of these orders was ever suspended and hence under the statute continued to be “effective” until superseded by a subsequent order.
*4302. Decisional law
There is a substantial body of decisional law affirming the presumptive validity of duly adopted rate orders and barring retroactive revision of such orders. Several courts have dealt with superseding rate orders, and courts have refused to return to the first in a series of rate orders and treat it — as the majority does here — as an ongoing base rate upon which all subsequent rates were built. Each order is based on a separate showing and determination as to reasonableness, and hence must be evaluated individually.
Board of Public Utilities Comm’rs v. New York Tel Co., 271 U.S. 23, 46 S.Ct. 363, 70 L.Ed. 808 (1926) furnishes a good example. In that case, the Supreme Court upheld a temporary injunction restraining the enforcement of telephone rates since the utility “could not be compelled to make up deficits in future net earnings out of the depreciation reserves accumulated in the past.”18 The Court, in barring retroactive ratemaking such as the majority sanctions here, went on to stress that “the law does not require the company to give up for the benefit of future subscribers any part of its accumulations from past operations. Profits of the past cannot be used to sustain confiscatory rates for the future."19
Twenty years later, in United States v. Public Utilities Comm’n, 158 F.2d 533 (D.C.Cir.1946), cert. denied, 331 U.S. 816, 67 S.Ct. 1305, 91 L.Ed. 1835 (1947), this court faced the issue of the presumptive validity of superseding rate orders even more directly than the Supreme Court had in New York Telephone. Public Utilities Comm’n upheld a rate order against a Government petition which asserted that the rate invalidly permitted some $29 million in excess profits collected under a pri- or rate to remain as an element in the rate base. The court expressly refused to undertake the backward-looking review that the majority undertakes here, observing:
[T]his court would be undertaking a wrongful invasion of the regulatory territory properly reserved for the Public Utilities Commission if we were to say ... that a high return on the common stock equity is, in and of itself, ample reason for retrospectively holding invalid rate schedules authorized by the Commission over a course of many years. It is only by saying retroactively that the rates extracted in former years were not “just and reasonable”, that we can conclude that the surplus of undistributed earnings was an unlawful accumulation which could not be devoted to the public service in such a fashion as to warrant allowing the Company to earn a return on it.
Id. at 535. The court also held that even if the Company had been less vigilant than it might have been in protecting consumer interests, superseding rate orders, if “just and reasonable” within a broad ambit of discretion, would not be disturbed by a reviewing body. Id. at 536. “High profits and just rates,” wrote the court, “are not prima facie incompatible.” Id. The court went on to examine a pattern of ratemak-ing and order-by-order proceeding strikingly similar to the pattern evidenced by the *431rate orders of the Commission in this case, and concluded:
[T]hroughout the many years during which the sliding scale arrangement has been in effect, the rates have been excessive and illegal. Each year, however, the rates were fixed by an order of the Commission.... The annual orders which fixed the rates became firm and conclusive when no person affected thereby availed himself of the right of appeal. Consequently the rates so fixed became the legal rates for the periods during which they were to endure, and neither the United States nor any other party affected thereby can brand them as illegal.
United States v. Public Utilities Comm’n, 158 F.2d at 537-38 (emphasis added). This earlier decision of our court applies here. It has never been overruled or criticized, and squarely contravenes the restitution-ary approach of the majority.20
Even more importantly, in Williams v. Washington Metro. Area Transit Comm’n, 415 F.2d 922 (D.C.Cir.1968), this court applied the principles developed in the aforementioned cases to the specific Commission involved in the present dispute. In a lengthy opinion, this court invalidated two Commission orders, Order No. 245 and Order No. 563. However, noting that those orders had been superseded by subsequent Commission rate orders, the court declined to remand for further consideration. Id. at 939-41. The decision states:
The propriety of another remand thus hangs on the Commission's power to devise a new order, nunc pro tunc, governing the years intervening between Order No. 245 and the entry of a subsequent order prescribing the “lawful fare ... to be in effect.” The Commission, however, possesses no authority to fix rates for the past. An order prescribing the lawful fares to be charged by a public utility, being essentially legislative in character, ordinarily speaks only for the future. And we find nothing in the statutory provisions governing the Commission’s regulatory responsibilities that indicates an intent to depart from this “customary pattern of fixing rates prospectively.” Hence, we conclude that the Commission lacks power to enter a new rate order in this proceeding, and that a remand for further consideration is not called for.21
Having ruled out remand as a remedial step, the court in Williams turned to the formulation of a restitutionary award. However, quite unlike the approach of the majority here, the court, invoking venerable principles of equity, adopted a flexible, rather than a maximalist, approach to restitution:
Since restitution is not a matter of right, but is “ex gratia, resting in the exercise of sound discretion,” it lies within our authority to direct restitution in an amount less than the whole sum of the increased fares collected under the invalid order, or to deny it altogether, if corn-*432pelting equitable considerations so dictate.
Id. at 944 (citations omitted). Thus, also in contrast to the instant case, the court chose, in Williams, to award only partial restitution, holding that “it would be unfair to order Transit to restore the full amount it realized under the invalid fare increase.” Id. at 945. And, unlike the majority here, the court was highly sensitive in Williams to the substantial effect the intervening time might have on the validity of rate orders and the error inherent in perpetuating one determination of invalidity far beyond its effective period:
[W]e are confronted by circumstances indicating a substantial probability that it would be inequitable to compel Transit to restore the entire amount it realized from the fare increase.... We could not permit the Commission’s latter conclusion to control the amount of restitution now to be ordered, since it was based on a record reflecting conditions in years later than the period relevant here, and it did not purport to be a determination of a fair return for the years with which we are concerned_ [W]e are unable to see how any proper resolution of the matter of restitution in the circumstances presented could ignore the reality of Transit’s financial experience during the years in question.
Id. at 944-46 (citations omitted; emphasis added). Ultimately, the Williams court decided to “compel Transit to restore the amount realized by the fare increase only to the extent that its actual return [was] not reduced to an amount which all parties have agreed would be unreasonably low.” Id. at 946. Transit was therefore permitted to retain “any portion of the higher fares necessary to preserve its actual earnings during the years in question at the level conceded by the protestants to represent a fair return.” Id. Although, con-cededly, the Commission here has not been as hospitable to Transit’s claims as the protestants in Williams apparently were, the decision of the majority to completely jettison the subtle approach of the court’s earlier equitable opinion is not logically tenable.
In several recent cases involving the precise D.C.Code provisions applicable here, the D.C. Court of Appeals has also barred the type of retroactive utility ratemaking which the majority orders here. In the interest of brevity, one example will suffice. In Potomac Elec. Power Co. v. Pub. Serv. Comm’n, 380 A.2d 126 (D.C.App.1977), reviewing a utility’s petition to set aside a Public Service Commission rate order as confiscatory, the D.C. Court of Appeals emphasized both the limited scope of its authority to review Commission orders and the solicitude afforded utilities which increase rates to match costs and earn a fair rate of return. Id. at 131-32.
More importantly, the court rejected the idea that a rate could remain applicable for any period beyond that for which it was effective by its terms, holding that “a valid test period [for forecasting rate requirements] must be based on the utility’s most recent actual experience, with adjustments for all known changes affecting costs and revenues for the immediate future.” Id. at 133. The decision recognized very coherently the principle, ignored or forgotten by the majority, that superseding rates are often very different animals than their predecessors, and respond to a wide array of costs, needs and circumstances that are different and newly developed. Hence, in holding that earlier rates were no longer viable and that higher charges were merited, the D.C. Court of Appeals held:
It is well settled that the rate maker may not rely on out-of-date information when more recent actual experience, which shows a substantial disparity between the earlier forecasts and the rate of return actually earned, is available.... Suitable adjustments must be made to accommodate the latest available relevant data....
Id. at 134 (citation omitted).
With respect to relief, the court ordered that “the Commission ... place itself in a position to provide the rate relief it legally was bound to give at the time of its [earlier order].... To do otherwise would be to give perpetual legal effect to an unlawful order, and to unnecessarily and unwarrant-*433edly penalize Pepeo, its investors, and indeed its customers for the passage of time necessitated by appellate review of that unlawful order.” Id. at 148 (emphasis added). It is this principle of separating the period of one rate order from another that the majority refuses to observe.22 In lieu thereof, the majority creates a “rate base” theory out of whole cloth and notwithstanding the provision of the applicable statute that the superseding orders establishing rates here are “prima facie reasonable,” the court applies a “rate base theory” that perpetuates an invalid order ad infinitum through all the superseding rate orders. D.C.Code § 43-703 (1967). The majority ignores the fact that the nunc pro tunc invalidation of Order 773 does not mean that superseding rate orders, duly adopted as reasonable adjustments on the basis of “the latest available operating data,”23 are merely incremental to the earlier order and therefore invalid. Rather, the superseding orders are independent successor rate determinations that are “pri-ma facie reasonable” (id.) and hence valid until the contrary is found in a due process “action” — a presumption which ratepayers only challenged in one subsequent case, and then only with partial success.24
One final case which the majority fails to even mention, despite its widespread citation as authority against retroactive rate-making, merits attention here. In Commonwealth v. Old Dominion Power Co., 184 Va. 6, 34 S.E. 364 (1945), a suit by purchasers of electrical energy against a utility for refund of overcharges, the Virginia Supreme Court was faced, as this court is faced today, with superseding rate orders.25 The court held that the Commission was without authority “to put into effect, retroactively, reduced rates applicable to petitioners, and require the power company to refund to them the overcharges collected of them.” 34 S.E.2d at 366. Applying state laws similar to the D.C.Code provisions applicable here, the court affirmed that ratemaking could be prospective only. The case holds:
There is nothing in any of the statutes to which we have referred which either expressly or impliedly gives the Commission authority to give retroactive effect to rates which may be substituted by it for the existing rates of any public utility- On the contrary ... the statutes are designed to fix rates for the future. ... The action of the Commission shall have a prospective rather than a retrospective effect.
Id. at 367-68. The statutes here, as in Old Dominion, confer no power to engage in retroactive ratemaking.26 The rate orders reviewed in Old Dominion were, as were those promulgated by the Commission here, presumed to be reasonable and effective until altered in the manner and within the period provided by statute, at which *434time the newly enacted rate would then become entitled to such presumption.27 This conclusive presumption of reasonableness applies to each of the superseding rates approved by the Commission after Order 773 was superseded. The court today simply ignores the mandatory statutory presumption of reasonableness, and in its place applies a de facto presumption of mw reasonableness based on a prior — and essentially unrelated — invalidation.
The majority thus erroneously stretches the restitutionary period from the 277 days that Order 773 was in effect for an additional 1,549 days until Transit, on January 14, 1973, was taken over by public authorities under the power of eminent domain. Giving such perpetual effect to Order 773 contravenes the heavy weight of authority both in this Circuit and elsewhere against retroactive ratemaking. Restitution in this case should be awarded only for overcharges received during the period that Order 773 was in effect, i.e., until it was superseded by Order No. 882 on October 18, 1968.28 The majority’s perpetuation of the invalidity of Order 773 far beyond the period that it was effective, on the rationale that all subsequent orders were merely incremental to Order 773, constitutes an untimely, outlawed and unprecedented departure from the statutory presumption of reasonableness and validity that accompanies duly adopted rate orders. Such conclusion constitutes nothing more than a post hoc rationalization for retroactively invalidating rate orders for alleged “incre-mentalism” when the orders themselves bore no indication of “incrementalism.” In this, the majority commits the error of post hoc rationalization which the Supreme Court warned against in SEC v. Chenery, 332 U.S. 194, 196, 67 S.Ct. 1575, 1577, 91 L.Ed. 1995 (1947), and Burlington Truck Lines v. United States, 371 U.S. 156, 167-69, 83 S.Ct. 239, 245-46, 9 L.Ed.2d 207 (1962).29
The opinion of the majority, in its claimed reliance on “equity,” also violates the time-honored principle that “equity aids the vigilant, not those who slumber on their rights.” 2 J. Pomeroy, Equity Jurisprudence 169 (5th ed. 1941).30 To treat all superseding orders as having been determined on an incremental “rate base” approach at this late date, when farepayers were not vigilant and failed timely to attack Orders 882, 900, and 984 on that ground, would thus award petitioners a *435wholly unjustified windfall benefit at Transit’s expense.
The majority opinion, finally, is internally inconsistent. In closing, it states that:
The Commission must ensure that the total amount of restitution does not exceed the total of the fare excesses purportedly authorized by the orders under review in these cases.
Opinion at 422. However, the truth of the matter is that by extending 773 as an ongoing fare order for 1,549 days despite the short life of 277 days during which it was effective, the majority extends the operation of Order 773 to periods covered by all subsequent orders that were never properly challenged by any “action” as required by the statute.
III. Equitable Adjustments to the Restitutionary Award
Finally, I cannot concur in the rejection by the majority of four of Transit’s five requests for equitable adjustment of the restitutionary award. Transit advances five grounds for such adjustment, as follows:
(1) Investors should not be denied a reasonable rate of return on their investment.
The majority (at 417) rejects this argument. I cannot agree, for the reasons discussed in Part I.
(2) Transit should keep the gain from appreciation in value attributable to the difference between market and book value.
The majority (at 417) rejects this argument as well. I disagree, because denying Transit such gain deprives it of both the benefit of the bargain that it struck and the fair return due on its capital investment.31 Moreover, under settled principles of utility regulation, such deprivation is confiscatory and therefore violative of the Fifth Amendment to the Constitution.32
(3) Transit should be credited for payments made to the District of Columbia in accordance with the agreed settlement of the company’s contractual obligation to remove abandoned trolley tracks and repair streets.
The majority (at 417-418) denies any such equitable offset. The position of the majority on this point is especially curious in light of its allowance of deductions for brokerage fees and taxes (id. at 412-413) and capital gains taxes (id. at 413-415) paid by Transit on the sale of the Fourth Street Shop and Southern Carhouse. Such offsets are consistent with similar allowances we have made earlier in this litigation,33 and accord with established precedents of this Court. “As a general proposition,” we held in Public Service Co. of New Mexico v. Federal Energy Reg. Comm’n, 653 F.2d 681, 683 (D.C.Cir.1981), “a regulated utility is allowed to recover from ratepayers all expenses incurred, including income taxes, plus a reasonable return on capital invested in the enterprise and allocated to public use.”34
(4) Transit is entitled to an offset for earlier monies credited to the farepayer fund.
The majority grants such an offset. I concur, for the same reasons that I would grant the track removal/street repair offset.
*436(5) Transit may recoup from farepayers any deficiency which existed in its reserve for injuries and damage at the time that its franchise was terminated.
The majority denies such recoupment. I dissent from this denial, because Transit could have passed this deficiency on to farepayers, recovering what it needed through a higher fare. Since this was an uncompensated expense, Transit is, on the strength of the authority cited for claim (3) above, entitled to an equitable offset.
Conclusion
In sum, while I concur in Parts I and III of the court’s opinion, I must respectfully dissent with respect to Part II. Interest should only be computed on Order 773 during the 279 days it was in effect; and restitution should not be computed for any fares received after October 18, 1968 (the date on which Order 773 was superseded by Order 882). Moreover, in calculating the award due farepayers, the Commission should not allocate restitution based on Transit’s gains from transfer of nondepre-ciable assets, and should also make the equitable adjustments in the award which the majority rejects.
. The majority opinion arrives somewhat late at this correct assessment of the efficiency and viability of Transit. See Democratic Central Comm. v. Washington Metro. Area Transit Comm’n (''DDC II"), 485 F.2d 886, 915 (D.C.Cir. 1973) (MacKinnon, J., concurring in part and dissenting in part), cert. denied, 415 U.S. 935, 94 S.Ct. 1451, 39 L.Ed.2d 493 (1974) (arguing "past management was perhaps not as inefficient as has been contended_”). On remand, the Commission, supported by independent expert study, came to the same conclusion. See "Report of the Commission on the Issues of ‘Efficiency’ and ‘Viability,’" In re: Remands from the United States Court of Appeals for the District of Columbia of D.C. Transit System, Inc. (Aug. 31, 1981) at 9-13, 40 (upholding Hearing Officer’s 448-page report finding that Transit was efficient and viable in 1970); “A Financial Analysis of D.C. Transit System, Inc. (District of Columbia) and Subsidiaries as of April 15, 1970,” reprinted in Appendix to Brief for Petitioner Black United Front on Viability and Efficiency Issues ("Laconto Report”).
The majority’s validation of the Commission’s finding of efficiency and viability mandates that, insofar as that issue is involved, the fare increases approved by Order 1052 were fair and reasonable, and are not subject to inclusion in the restitutionary calculation. See infra note 12.
. Washington Metropolitan Area Transit Regulation Compact (“Compacttit. II, art. XII, § 6(a)(3), incorporated into Pub.L. No. 86-794, 74 Stat. 1031 (1960).
. Cited in Democratic Central Committee v. Washington Metro. Area Transit Comm’n (“DCC I"), 485 F.2d 786, 796-97 (D.C.Cir.1973), cert. denied, 415 U.S. 935, 94 S.Ct. 1451, 39 L.Ed.2d 493 (1974).
. See also DCC I, 485 F.2d at 831 (MacKinnon, J., concurring in part and dissenting in part).
. See DCC I, 485 F.2d at 834-37 (MacKinnon, J., concurring in part and dissenting in part); see also Re D.C. Transit System, Inc. (Order No. 245), 48 P.U.R.3d 385, 399-400 (Wash. Metro. Area Transit Comm’n 1963).
. The principle of legitimate investor interest in a fair rate of return on investment is also well-established in the scholarly literature. See e.g., Bonbright, Principles of Public Utility Rates (1961); E. Gellhorn & R. Pierce, Regulated Industries in a Nutshell 134-44 (1987); E. Nichols, Ruling Principles of Utility Regulation: Rate of Return 47-48 (1955).
. Quite apart from the depreciable/nondepreciable distinction, it should be noted that the Opinion's preference for the "book-to-market” method of calculating gain allocable to farepay-ers (Maj. op. at 411), as opposed to the "market-to-market” method (which would require subtraction of market value on date of first operation from market value at time of transfer), is open to question. Although I feel constrained to concede that (as the majority notes) our instructions to the Commission in DCC I, 485 F.2d at 827, and DCC II, 485 F.2d at 914, effectively directed calculation according to the former method, further reflection indicates that the latter method may better accord with investors’ entitlement to the benefit of their bargain and also provide a better approximation of real value, since book value is usually a poor indicator of an item’s worth. See generally G. Johnson & J. Gentry, Finney’s Principles of Accounting, 367, 372 (8th ed. 1980).
. See DCC I, 485 F.2d at 833, 845-47 (Mac-Kinnon, J., concurring in part and dissenting in part); see also Southern Natural Gas Co. v. Fed. Energy Reg. Comm’n, 813 F.2d 364, 369 (11th Cir.1987).
. See, e.g., In re Permian Basin Area Rate Cases, 390 U.S. 747, 767, 791, 88 S.Ct. 1344, 1360, 1372, 20 L.Ed.2d 312 (1968); Public Serv. Comm’n v. Econ. Reg. Admin., 777 F.2d 31, 36 n. 6 (D.C.Cir.1985).
. 72 P.U.R.3d 113, 158 (WMATC 1968).
. 81 P.U.R.3d 417 (WMATC 1969).
. It should be emphasized that (subject to the validity of my objection to the majority’s decision with respect to the allocation of gain on land) no part of this Court's restitutionary award in this case should be construed to compensate farepayers for overcharges allegedly imposed by Order 1052. This follows from the majority’s conclusion (Maj. op. at 405-407) that, on remand, the Commission correctly found Transit to be efficient and viable in 1970 and thus recognized the valid basis for Order 1052 that the court had found lacking in DCC II, 485 F.2d at 913. As the Opinion notes:
The Commission thus has cured its neglect of Transit’s efficiency and viability when it promulgated Order No. 1052 by investigating and determining those matters on remand. It follows that Transit’s farepayers are not entitled to any restitution on the now-refuted theory of a lack of efficiency or viability on Transit’s part in 1970.
Maj. op. at 407 (emphasis added).
. Id. at 415-16.
. Id. at 416.
. Id. at 415.
. Id. at 416, n. 105 (quoting Report of the Hearing Officer, In re Remands from the United States Court of Appeals for the District of Columbia Circuit of D.C. Transit Sys., Inc. (Feb. 17, 1978), at 26).
. Id. at 416.
. 271 U.S. at 28, 46 S.Ct. at 364 (emphasis added).
. Id. at 32, 46 S.Ct. at 366 (emphasis added); see also Federal Power Comm’n v. Colorado Gas Co., 348 U.S. 492, 501, 75 S.Ct. 467, 472, 99 L.Ed. 583 (1975) ("it is not the function of a court itself to engage in ratemaking"); Federal Power Comm’n v. Hope Natural Gas Co., 320 U.S. 591, 602, 618, 64 S.Ct. 281, 295, 88 L.Ed. 333 (1944) (“He who would upset the [FPC] rate order under the [Natural Gas] Act carries the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences...at the same time, the Commission had no power to make reparation orders or to fix past rates); Federal Power Comm'n v. Natural Gas Pipeline Co., 315 U.S. 575, 590, 62 S.Ct. 736, 745, 86 L.Ed. 1037 (1942) (constitutional challenge to Natural Gas Act; "regulation does not insure that the business shall produce net revenues, nor does the Constitution require that the losses of the business in one year shall be restored from future earnings by the device of capitalizing the losses and adding them to the rate base on which a fair return and depreciation allowance is to be earned.”); cf. United States v. Utah Construction & Mining Co., 384 U.S. 394, 421-22, 86 S.Ct. 1545, 1559-60, 16 L.Ed.2d 642 (1966); (res judicata bar to reopening settled matters).
. See also Washington Gas Light Co. v. Baker, 188 F.2d 11, 21 & n. 43 (D.C.Cir.1950), cert. denied, 340 U.S. 952, 71 S.Ct. 572, 95 L.Ed. 686 (1951) (“We recognize that the legality of past rates may not be challenged, and that past excessive earnings belong to the Company just as past losses must be borne by it.”) (emphasis added); Public Service Comm’n of New Hampshire v. FERC, 600 F.2d 944 (D.C.Cir.1979) (barring FPC from approving retroactive rate increases); Goodman v. Public Service Comm’n, 467 F.2d 375 (D.C.Cir.1972) (order establishing fair rate of utility return was final order subject to review even though superseded by later orders); Payne v. Washington Metro Area Trans. Comm’n, 415 F.2d 901, 910 (D.C.Cir.1968) ("established ratemaking principle[s] ... preclude[ ] a utility from charging higher fares in the future in order to recoup past losses”); TWA v. C.A.B., 385 F.2d 648 (D.C.Cir.1967); City of Chicago v. FPC, 385 F.2d 629 (D.C.Cir.1967); Gas Service Co. v. FPC, 282 F.2d 496 (D.C.Cir.1960); Memphis Light, Gas & Water Div. v. FPC, 250 F.2d 402 (D.C.Cir.1957); cf. Greater Boston Television Corp. v. F.C.C., 463 F.2d 268, 291, cert. denied, 406 U.S. 950, 92 S.Ct. 2042, 32 L.Ed.2d 338 (1972) (res judicata bar to retroactive proceeding).
. 415 F.2d at 940-41 (citations omitted). The opinion cited (id., at 941 n. 95) Washington Gas Light Co. v. Baker, 195 F.2d 29, 35 (D.C.Cir.1951), in which this court held that ‘‘[r]emand to the Commission, in the circumstances of this case, could not be to enable a rate order to be superimposed upon the old application...."
.See also People’s Counsel of the District of Columbia v. Public Service Comm’n, 455 A.2d 391 (D.C.App.1982) (affirming order granting rate increase since Commission properly used utility’s end of period rate base rather than average test year rate base to counter effect of attrition); Potomac Elec. Power Co. v. Public Service Comm’n, 402 A.2d 14, 18 (en banc) (D.C.App.), cert. denied, 444 U.S. 926, 100 S.Ct. 265, 62 L.Ed.2d 182 (1979) ("[i]f recent operating figures are completely ignored, the new rate will be based on old and perhaps no longer valid data.... Although ... the rights of the company to rate relief must be balanced against the interests of the consumer ... it is nonetheless important, in fairness to all, that the latest available operating data not be ignored.”); Washington Gas Light Co. v. Public Service Comm'n, 452 A.2d 375, 379, 382-83 (D.C.App.1982) (approving utility rate increase as a result of market pressures and flotation costs associated with issuance of common stock; invoking policy against retroactive ratemaking and holding that rate orders of Public Service Commission, like those of FERC in federal context, entitled to great deference); Wash. Gas Light Co. v. Public Service Comm’n, 450 A.2d 1187 (D.C.App.1982); Chesapeake & Potomac Tel. Co. v. Public Service Comm’n, 330 A.2d 236 (D.C.App.1974).
. See Potomac Elec. Power Co. v. Public Service Comm’n, 402 A.2d at 18.
. See supra n. 12.
. One rate took effect on May 1, 1939, the other on July 23, 1941.
. The statutory law here, as in Old Dominion, is therefore distinguishable, for example, from the express power given the Interstate Commerce Commission, under the Interstate Commerce Act, to engage in retrospective regulation.
. 34 S.E.2d at 368 (‘‘[R]ates are commission-made, and as long as they are in force they are conclusively presumed to be reasonable ... [t]he Commission has no power to declare them unreasonable retroactively once they are legally established....” (quoting Mathieson Alkali Works v. Norfolk & Western R. Co., 147 Va. 426, 447, 137 S.E. 608, 614 (1927)); see also City of Norfolk v. Va. Elec. & Power Co., 197 Va. 505, 90 S.E.2d 140, 148 (1955) (reviewing Commission's authorization of rate based on utility's use of "escalator clause” which tied charges to company's costs; Commission could not “condemn rates retroactively once legally established ... [and did] not have the power to redetermine rates for a past period at a different level from those actually charged in accordance with filed schedules because that would be to make retroactive rates.") (citing Old Dominion, 184 Va. at 15, 34 S.E.2d at 367-68).
. See supra note 12.
. In Chenery and Burlington Truck Lines, the Supreme Court held it unlawful to sustain administrative orders on a basis not set forth in the order. Chenery stressed the "fundamental rule of administrative law.... that a reviewing court, in dealing with a determination or judgment which an administrative agency alone is authorized to make, must judge the propriety of such action solely by the grounds invoked by the agency." 332 U.S. at 196, 67 S.Ct. at 1577 (emphasis added). The same reasoning applies by analogy when petitioners seek to modify a rate order on the basis of some element not announced in that order. Here, the Opinion challenges an order on the basis that it was incremental, even though there was no statement or assertion in any of the four orders that superseded Order 773 that the rates fixed by such subsequent orders were merely incremental or were not based on the most recent financial data that was before the Commission. Rather, each subsequent fare order represented, at the time of its issue, a reasonable charge for mass transit service. The majority seems to have conjured up a contrary conclusion here as a mere post-hoc rationalization for imposition of what it deems an equitable result, long beyond the date that the statute of limitations would permit an attack on the rate fixed by any of the superseding orders.
.See Jinks v. Mays, 464 F.2d 1223, 1227 (5th Cir.1972), reh'g denied, 471 F.2d 649 (5th Cir.1973).
. See supra Part I; infra n. 32.
. See Chicago M. & St. P.R. Co. v. Minnesota ex rel. Railroad & Warehouse Comm’n, 134 U.S. 418, 10 S.Ct. 462, 33 L.Ed. 970 (1890):
If the company is deprived of the power of charging reasonable rates for the use of its property, and such deprivation takes place in the absence of an investigation by judicial machinery, it is deprived of the lawful use of its property, and thus, in substance and effect, of the property itself, without due process of law and in violation of this Constitution of the United States; and insofar as it is thus deprived, while other persons are permitted to receive reasonable profits upon their invested capital, the company is deprived of the equal protection of the laws.
134 U.S. at 458, 10 S.Ct. at 467. See generally E. Nichols, Ruling Principles of Utility Regulation: Rate of Return 10-13 (1955).
. See D.C. Transit System, Inc. v. Washington Metro. Area Trans. Comm’n, 485 F.2d 881 (D.C.Cir.1973).
. Accord, Nepco Municipal Rate Comm’n v. Federal Energy Reg. Comm’n, 668 F.2d 1327, 1335 (D.C.Cir.1981).