Opinion ID: 1297749
Heading Depth: 1
Heading Rank: 15

Heading: Legislative Advocacy.

Text: [36] Pacific included $17,000 as test-year operating salaries and expenses on account of legislative advocacy. In support of this item it presented evidence that it is the largest private employer in California, the largest corporate taxpayer, and the largest private motor vehicle fleet operator; that, confronted by approximately 500 bills introduced in the average legislative session which would affect the telephone service, Pacific assigns certain employees to analyze such bills and their effect upon the telephone service and to provide necessary technical information to legislators and their staffs, with consequent substantial benefit to and protection of the telephone service. The commission disallowed the entire $17,000 with the declaration in its decision that We do not here reach the issue of [Pacific's] right to engage in such activity.... [But when Pacific] claims benefits to its ratepayers from such activities, it is presuming to determine without consent or prior knowledge of such ratepayers what pending legislation is or is not beneficial to them. Even conceding that such activity in a given instance may prove to be beneficial to ... ratepayers, we hold that they should not be required to pay for costs of such legislative advocacy without having the opportunity to make their own judgments on what legislative proposals they would or would not favor and to designate who, if anyone, should advocate their interests before the Legislature. Accordingly, we find that ... test year intrastate expenses should be adjusted downward by $17,000 ... to reasonably exclude for rate-fixing purposes [Pacific's] claimed costs of legislative advocacy. Pacific contends that such legislative activities as outlined in its evidence, and as distinguished from possible expenditures in attempts to improperly influence legislation and legislators, are a reasonable necessity for the operation of a public utility of the size and complexity of Pacific, and that in fixing rates the allowance of reasonable expenditures therefor would be appropriate. However, we agree with the general policy of the commission that the cost of legislative advocacy should not be passed on to the ratepayers and find the disallowance proper.