Opinion ID: 1833875
Heading Depth: 1
Heading Rank: 3

Heading: regarding point c:

Text: This point concerns the alleged departure from essential requirements by the Commission in allowing the two companies involved in the instant cause to make charitable contributions and deduct the same as operating expenses. In Orders 4076 and 4078 the Commission made the following statements: We recognize that there is a diversity of treatment of this issue by regulatory agencies. Some allow charitable contributions as an operating expense; some do not. Some courts have approved the allowance; others have approved the disallowance. In our opinion, charitable contributions are a part of the utility's cost of doing business. Utilities are fair game for those who solicit contributions on behalf of a community's charities... . So long as the contributions are reasonable in amount, we consider that they are properly chargeable to operating expenses for rate-making purposes. The Commission is quite correct in its observation in the instant cases that there is diversity of opinion and treatment on the matter of charitable contributions by utilities companies. Research fails to disclose any decision or determination by this Court on this particular point. The Commission, however, in 1962 said in the case of Re General Telephone Co. of Florida, 44 P.U.R.3d 247, that public utilities must be good citizens and the public expects contributions such as these. It would be rather a strained construction to say that such items, in reasonable amounts, are not a permissible part of the operating costs of a public utility. (At 254; emphasis added.) Likewise, the Federal Power Commission said in 1964 in the case of Re United Gas Pipe Line, 54 P.U.R.3d 285: We believe that contributions of a reasonable amount to recognized and appropriate charitable institutions constitute a proper operating expense. Corporations have an obligation to the communities in which they are located and they are expected to recognize this obligation. It is our opinion that these contributions have an important relationship to the necessary costs of doing business. (At 295; emphasis added.) We are of the opinion that the better concept on this matter is that set forth by the Florida Public Service Commission in Re General Telephone Co. of Florida, supra, and by the Federal Power Commission in Re United Gas Pipe Line, supra. Namely, if contributions are of a reasonable amount to recognized and appropriate charities, then they may be classified as legitimate operating expenses. Petitioner herein fails to make any conclusive showing that the amounts contributed by Florida Power and Southern Bell are either unreasonable or made to inappropriate charities.