BILL ANALYSIS �
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THIRD READING
Bill No: AB 340
Author: Bradford (D)
Amended: 4/25/13 in Assembly
Vote: 21
SENATE ENERGY, UTILITIES & COMMUNICATIONS COMM. : 6-2, 6/18/13
AYES: Padilla, Corbett, DeSaulnier, Hill, Wolk, Wright
NOES: Fuller, Knight
NO VOTE RECORDED: Cannella, De Le�n, Pavley
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/30/13
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
ASSEMBLY FLOOR : 50-21, 5/23/13 - See last page for vote
SUBJECT : Public utilities: Electric Program Investment
Charge: disposition
SOURCE : Author
DIGEST : This bill requires the Public Utilities Commission
(PUC) 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).
ANALYSIS :
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Existing law:
1. Directs the PUC to require each electrical, gas, water, and
telephone corporation, and each wireless telecommunications
service provider, with gross annual revenues exceeding $25
million, to submit annually a plan for increasing procurement
with WMDVBEs in all categories, including, but not limited
to, renewable energy, wireless telecommunications, broadband,
smart grid, and rail projects.
2. Requires each of these same entities to submit an annual
report to the PUC regarding implementation of its WMDVBE
program and requires the PUC to annually report to the
Legislature on the progress of utilities in implementing
their WMDVBE programs.
Current decisions of the PUC require collection from ratepayers
of an EPIC to fund public interest investments in research and
development, technology demonstration and deployment, and market
facilitation of clean energy technologies and approaches, with
funds to be awarded by the California Energy Commission (CEC)
and electric utilities
This bill:
1. Requires the PUC 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.
2. Requires the PUC, no later than 2014, to report on its
progress with this program in its annual WMDVBE report to the
Legislature.
Background
Supplier Diversity Program . Beginning in 1986, the Legislature
enacted a series of statutes, and the PUC 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 (including wireless telecommunications
providers), with gross annual revenues exceeding $25 million,
and their PUC-regulated subsidiaries and affiliates, are
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required to participate. PUC-regulated water utilities
originally were not required to participate in the program but
were added in 2009. AB 1386 (Bradford, Chapter 443, Statutes of
2011) encouraged voluntary participation by cable television
corporations and direct broadcast satellite providers, which are
not generally subject to PUC jurisdiction.
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, 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 PUC is required to make an
annual report to the Legislature on utility progress in meeting
WMDVBE goals.
In May 2011, the PUC 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.
In March 2013, the PUC reported that companies participating in
its Supplier Diversity program achieved a new record, procuring
approximately $8.1 billion in goods and services from WMDVBE
suppliers, with the largest utilities all procuring more than 36
percent from diverse firms.
EPIC . The PUC 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 PUC approves every three years. The administrators
are required to make individual project awards primarily through
competitive bidding, with sole-source contracts and interagency
agreements if justified. Contractor evaluation guidelines
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included in a pending Proposed Decision approving administrator
investment plans specify WMDVBE status of the bidder or
subcontractor as a criterion for IOUs (investor-owned utility)
to use, although it is not clear if the CEC is required to
follow those guidelines.
Comments
According to the author, "The State has adopted and funded
millions of dollars in job training programs in energy
efficiency and renewable energy technologies. After the training
is complete we need to make sure that jobs are available for
these graduates. And these jobs should not be limited to just
construction jobs - they need to include all of the types of
jobs common in the energy industry, such as technical support,
administration, legal, finance, engineering, economics,
management, and entrepreneur. Currently ratepayer funded energy
research programs do not have to report on their programs and
progress toward including women, minorities, and disabled
veterans.
"My bill would ensure that the EPIC program administrators have
such programs and report on their progress. This is the kind of
program that can help these women, minorities, and disabled
veterans gain the experience that will lead them to better
opportunities in the executive offices and board rooms of
California energy companies."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
One-time costs of $80,000 (special) to the PUC 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 a WMDVBE
program for EPIC funds.
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Minor and absorbable costs to the CPUC to write a report on
the progress of this program.
SUPPORT : (Verified 8/29/13)
California Public Utilities Commission
ASSEMBLY FLOOR : 50-21, 5/23/13
AYES: Alejo, Ammiano, Atkins, Bloom, Blumenfield, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Chesbro, Cooley, Daly, Dickinson, Eggman, Fong,
Fox, Frazier, Garcia, Gatto, Gomez, Gray, Hall, Roger
Hern�ndez, Jones-Sawyer, Levine, Lowenthal, Medina, Mitchell,
Mullin, Muratsuchi, Nazarian, Pan, V. Manuel P�rez, Quirk,
Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Weber,
Wieckowski, Williams, Yamada, John A. P�rez
NOES: Achadjian, Allen, Bigelow, Ch�vez, Conway, Dahle,
Donnelly, Beth Gaines, Hagman, Harkey, Linder, Logue,
Maienschein, Mansoor, Melendez, Morrell, Nestande, Olsen,
Patterson, Wagner, Wilk
NO VOTE RECORDED: Gordon, Gorell, Grove, Holden, Jones, Perea,
Waldron, Vacancy, Vacancy
JG:d 8/31/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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