BILL ANALYSIS Ó 1 SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE ALEX PADILLA, CHAIR AB 1386 - Bradford Hearing Date: July 5, 2011 A As Amended: June 13, 2011 FISCAL B 1 3 8 6 DESCRIPTION Current law requires the California Public Utilities Commission (CPUC) to require each electrical, gas, water, and telephone corporation, and each wireless telecommunications service provider, with gross annual revenues exceeding $25 million, and their CPUC-regulated subsidiaries and affiliates, to submit annually a detailed and verifiable plan for increasing procurement with women, minority, and disabled veteran business enterprises (WMDVBEs). Current law requires each electrical, gas, water, and telephone corporation, and each wireless telecommunications service provider, with gross annual revenues exceeding $25 million, to submit an annual report to the CPUC regarding implementation of its WMDVBE program. This bill states the declaration of the Legislature that each cable television corporation and direct broadcast satellite provider is encouraged to voluntarily adopt a plan for increasing WMDVBE procurement and to voluntarily report activity in this area to the Legislature on an annual basis. Current law requires the CPUC to annually report to the Legislature on the progress of utilities in implementing their WMDVBE programs. This bill requires the CPUC to make this annual report available on its Internet Web site. BACKGROUND Beginning in 1986, the Legislature enacted a series of statutes, and the CPUC adopted General Order (GO) 156, to encourage the award of a fair proportion of all utility contracts for products and services to WMDVBEs. Commission-regulated water utilities originally were not required to participate in the program but were added in 2009. AB 1918 (Davis, 2010) expressly added wireless telecommunications service providers, although, as telephone corporations, they already were required to participate. These entities are required to annually submit a detailed and verifiable plan, with goals and timetables, for increasing WMDVBE procurement in all categories of procurement, including technology, equipment, supplies, services, materials, and construction. A separate annual report on progress made in meeting those goals also is required. GO 156 specifies guidelines for the utilities to follow in meeting WMDVBE requirements, including the following procurement goals: 5% of all procurement from woman-owned business enterprises; 15% from minority-owned business enterprises, and 1.5% for disabled veteran-owned businesses enterprises. There is no penalty for failure of a utility to meet its goals. The CPUC is required to make an annual report to the Legislature on utility progress in meeting WMDVBE goals. Cable television corporations and direct broadcast satellite providers are not utilities generally subject to the CPUC's jurisdiction and, therefore, are not subject to WMDVBE requirements. On May 6, 2011, the CPUC issued a decision (D.11-05-019) reaffirming its support of the policy goals of GO 156, particularly the economic benefits to ratepayers and communities, and amended GO 156 to enhance transparency and accountability of the program. The transparency changes include requiring utilities to file GO 156 annual reports electronically and requiring the CPUC to post those reports on its website. COMMENTS 1. Author's Purpose . According to the author, minority and women-owned businesses historically have not been at the contracting table within emerging technology industries. The state and federal government have made broadband deployment a priority and have made nearly a billion dollars available in grants and loans to expand broadband nationwide. Participation of minority and women-owned businesses in the broadband industry will be critical to job recovery because these businesses are more likely to hire diverse workers, which represent more than half of California's population. 2. Transparency . The requirement in this bill that the CPUC make its annual report to the Legislature available on its web site is consistent with the transparency requirements the CPUC adopted in May 2011. 3. Broadband Deployment . Deployment of broadband infrastructure in California's unserved areas will require a variety of technologies, including satellite service in areas with rough and remote terrain. To the extent that cable television corporations and direct broadcast satellite providers voluntarily adopts a WMDVBE plan and reports to the CPUC its progress on implementing its plan, the CPUC will be able to track the degree to which these entities contract with WMDVBEs in their deployment of broadband and in provision of other services. ASSEMBLY VOTES Assembly Floor (53-21) Assembly Utilities and Commerce Committee (11-0) POSITIONS Sponsor: Author Support: Santa Maria League of United Latin American Citizens, Council #3187 The Greenlining Institute Oppose: None on file Jacqueline Kinney AB 1386 Analysis Hearing Date: July 5, 2011