I. Nothing herein shall prevent any public utility from granting free or reduced rate service to its officers and employees, nor any telephone or telegraph utility from granting franks for free service to the officials of other utilities engaged in the operation of telephone or telegraph properties, nor prevent any public utility from granting free or reduced rate service to charitable organizations or to municipalities.
II. In the case of electric utilities, if such a utility offers free or reduced rate service to its officers and employees, as provided in paragraph I of this section, then the subsidy created by such service shall be borne by all classes of customers in direct proportion to each class’s consumption of kilowatt hours.