The U.S. Supreme Court case Duquesne Light Co. et al. v. Barasch et al., 1988, revolved around the issue of utility rate regulation and its relation to the Constitution's "takings" clause, which prevents private property from being taken for public use without just compensation. The Pennsylvania Public Utility Commission denied two electric companies' requests to increase their rates in order to recover costs associated with construction of nuclear power plants that were no longer deemed economically viable due to changes in demand and regulatory climate after Three Mile Island accident. The utilities argued this denial violated their constitutional rights by not allowing them a fair return on investment, effectively constituting a taking of property without compensation. However, the Supreme Court upheld the state commission’s decision stating that it was within its authority under state law and did not violate any federal constitutional protections provided by takings clause or due process clause as long as they allow utilities an opportunity for reasonable profit over time even if some investments turn out unprofitable retrospectively.

In the dissenting opinion for Duquesne Light Co. et al. v. Barasch et al., Justice Blackmun, joined by Justices Brennan and Marshall, argued that the majority's decision was a departure from established precedent regarding rate regulation in public utilities law. They contended that under prior case law, it had been accepted that when a utility company makes an investment in good faith reliance on regulatory policies allowing recovery of costs through rates charged to consumers, those investments cannot be stranded by subsequent changes in policy without violating constitutional principles of fairness and due process. The dissenters believed this principle should have protected Duquesne Light Company's investments made under previous regulatory approval from being disallowed as imprudent after-the-fact based on new standards introduced later by Pennsylvania Public Utility Commission (PUC). They criticized the majority for failing to provide clear guidance about what constitutes "prudent" investment or how regulators should balance competing interests between consumers and investors while setting fair rates.