Court Opinion

ID: 9855342
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:23:03.745991+00
Date Added: 2024-06-11T09:25:44.218267
License: Public Domain

MOSK, J., Concurring.
I wish to explain briefly my reasons for joining in the court’s holding that the commission erred in acquiescing in Pacific’s past policy of sending telephone users a bill that includes the company’s gifts.
In establishing a future policy “to exclude from operating expenses for rate-fixing purposes all amounts claimed for dues, donations and contributions” the commission cannot justify allowing the sum of $305,000 as part of operating expenses during the test year. Contributions, being voluntary, are by definition not necessary to the furnishing of service by the public utility. (Central Maine Power Co. v. Public Utilities Com. (1957) 153 Me. 228 [136 A.2d 726, 731].)
Although some jurisdictions have reached a contrary conclusion, I am persuaded by Chesapeake & Potomac Tel. Co. v. Public Service Com. (1963) 230 Md. 395 [187 A.2d 475], which held at page 485 [187 A.2d]: “If charitable contributions are allowed as an operating expense of a monopoly, it amounts to an involuntary levy on the ratepayers.” A similar result was reached in Peoples Gas Light & Coke Co. v. Slattery (1939) 373 Ill. 31 [25 N.E.2d 482, 498].
*677Corporations are permitted to “make donations for the public welfare or for charitable, scientific, or educational purposes.” (Corp. Code, § 802, subd. (g).) A dissatisfied stockholder may seek to change the policies of a corporation, defeat the directors, or sell his stock investment. No comparable alternatives are available to a monopoly ratepayer, whose only choice is to pay the full bill sent to him—for services rendered and gifts made in the name of the company —or abandon the use of his telephone. The unfairness is manifest.
The commission’s declared future policy does not appear to prohibit the utility from making contributions but only precludes charging them as an involuntary levy on its ratepayers. This limitation is not only desirable in the future but also should have been applied to the recent test year. As stated in Carey v. Corporation Com. (1934) 168 Okla. 487 [33 P.2d 788, at 794]: “If as a matter of judgment [a gas corporation] desires to take part of its earnings, just as would an individual, and contribute them to a worthy public cause, it may do so; but we do not feel that it should be allowed to increase its earnings to take care thereof.”
Counsel for Pacific and for the amici curiae argue that contributions have provided indirect pecuniary benefit to Pacific. The suggestion that charitable donations are motivated by the donor’s expectation of financial return demeans the worthy institutions and beneficiaries involved. As stated in Denver Union Stock Yard Co. v. United States (1938) 304 U.S. 470, 483 [58 S.Ct. 990, 82 L.Ed. 1469, at p. 1480] : “It was not, and probably could not have been, proved that failure to respond [to requests for contributions] would adversely affect [the company’s] revenue.”
The commission’s legislative policy for the future is commendable, but it is at least a year overdue. Protection of ratepayers requires hereafter, as it should have in the past, scrupulous adherence to that policy.