BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 340 (Bradford) - Public utilities: Electric Program
investment Charge: disposition.
Amended: April 25, 2013 Policy Vote: EU&C 6-2
Urgency: No Mandate: No
Hearing Date: July 1, 2013 Consultant: Marie Liu
This bill may meet the criteria for referral to the Suspense
File.
Bill Summary: AB 340 would require the Public Utilities
Commission (CPUC) to establish a program to encourage the use of
women, minority, and disabled veteran business enterprises
(WMDVBEs) as prime contractors and subcontractors for all
grants, contracts, subsidies, financing, and activities
administered through the Electric Program Investment Charge
(EPIC).
Fiscal Impact:
One-time costs of $80,000 (special) to the CPUC to create
or modify an existing program to encourage participation of
WMDVBEs.
On-going costs of up to $125,000 annually (special) for
additional clearinghouse work and administration of an
WMDVBE program for EPIC funds.
Minor and absorbable costs to the CPUC to write a report on
the progress of this program.
Background: Beginning in 1986, the Legislature enacted a series
of statutes, and the CPUC adopted General Order (GO) 156, to
establish a Supplier Diversity program to encourage the award of
a fair proportion of all utility contracts for products and
services to WMDVBEs. Each electrical, gas, water, and telephone
corporation, with gross annual revenues exceeding $25 million,
and their CPUC-regulated subsidiaries and affiliates, are
required to participate. CPUC-regulated water utilities
originally were not required to participate in the program but
were added in 2009. The utilities are required to annually
submit a detailed and verifiable plan, with goals and
timetables, for increasing WMDVBE procurement in all categories,
including technology, equipment, supplies, services, materials,
AB 340 (Bradford)
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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.
The CPUC has ordered the collection of $162 million per year in
ratepayer funds from 2013 through 2020 to fund public interest
investments in research and development, technology
demonstration and deployment, and market facilitation of clean
energy technologies and approaches. The funds are to be
distributed by four program administrators - the CEC, San Diego
Gas & Electric Company, Pacific Gas and Electric Company, and
Southern California Edison Company - pursuant to investment
plans the CPUC approves every three years.
Proposed Law: This bill would require the CPUC to establish a
program to encourage the use of WMDVBEs as prime contractors and
subcontractors for all grants, contracts, subsidies, financing,
and activities administered through the EPIC Program, consistent
with GO 156. The CPUC would also be required to report on its
progress with this program by 2014.
Staff Comments: The CEC and the IOUs are the administrators of
the EPIC program. The IOUs are already required to comply with
GO 156 in all their procurement. Thus a new program is not
required for IOU administration of EPIC awards to encourage
diversity. However, this bill would also require the CEC to be
subject to GO 156, which would take CPUC action. The CPUC would
have discretion to modify GO 156 to include EPIC projects,
create a new WMDVBE program just for EPIC funds, or some
combination of the two. The cost of a proceeding to establish or
modify an existing program is likely to cost $80,000.
Depending on how an existing program is modified or the
parameters of a new program, the CPUC will incur some ongoing
costs to administer the program including new clearinghouse
responsibilities. These costs may be up to $125,000 annually.
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This bill would also require the CPUC to write a report on its
progress in increasing the participation of WMDVBEs by 2014. The
costs associated with this report is likely minor and
absorbable. Staff notes that should this bill become law, it
will become effective on January 1, 2014, the same year in which
the report is due. Staff additionally notes that GO 156 requires
annual reporting to the Legislature. It is unclear whether two
separate reports are necessary, even if the CPUC decides to
implement this bill in a new program separate from GO 156.