BILL ANALYSIS Ó 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 2760 - Utilities and Commerce Hearing
Date: June 23, 2014 A
As Introduced: March 24, 2014 Non-FISCAL B
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DESCRIPTION
Current law directs 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, to
submit annually a plan for increasing procurement with women,
minority, and disabled veteran business enterprises, generally
known as the Supplier Diversity program. (Public Utilities Code
§ 8283)
Current law requires each utility to submit an annual report to
the CPUC regarding implementation of its Supplier Diversity
program and requires the CPUC to annually report to the
Legislature on the progress of utilities in implementing these
programs. (Public Utilities Code § 8283)
Current law applies the Supplier Diversity program to
procurement in all categories, including, but not limited to,
renewable energy, wireless telecommunications, broadband, smart
grid, and rail projects. (Public Utilities Code § 8283)
This bill defines renewable energy for purposes of the Supplier
Diversity program as a project for the development and operation
of an eligible renewable energy resource meeting the requirement
of the California Renewables Portfolio Standard Program.
BACKGROUND
Supplier Diversity Program - 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 diverse enterprises. Each electrical,
gas, water, and telephone corporation (including wireless
telecommunications providers), 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. AB 1386 (Bradford, 2011)
encouraged voluntary participation by cable television
corporations and direct broadcast satellite providers, which are
not generally subject to CPUC jurisdiction.
The utilities are required to annually submit a detailed and
verifiable plan, with goals and timetables, for increasing
supplier diversity in all procurement 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 diversity
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 Supplier Diversity program goals.
In May 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. In March 2014, the CPUC reported
that companies participating in its Supplier Diversity program
achieved a new record in 2013, procuring approximately $8.5
billion in goods and services from diverse suppliers, an
increase of about $500 million over 2012 procurement. According
to the CPUC, more than 30 companies participate in the program,
with the following doing the most business with diverse firms in
2013:
Pacific Gas and Electric Company: $2.3 billion, or 42.1
percent;
Southern California Edison: $1.4 billion, or 40.99
percent;
AT&T: $1.2 billion, or 51.57 percent;
AT&T Wireless: $999 million, or 27.74 percent;
Sprint: $546 million, or 41.88 percent;
San Diego Gas & Electric: $453 million, or 44.88
percent;
Southern California Gas Company: $428 million, or 45.38
percent;
Verizon: $115 million, or 48.84 percent; and
Comcast $64 million, or 22.35 percent.
COMMENTS
1. Author's Purpose . According to the author, this bill
clarifies applicability of Supplier Diversity procurement
for renewable energy providers by adding a definition for
renewable energy that references the existing definition of
renewable energy in the Renewable Energy Portfolio statute.
2. Technical Issue . The Supplier Diversity program
requires annual plans from electric, gas, and telephone
corporations to include short- and long-term goals and
timetables, but not quotas, and shall include methods for
encouraging both prime contractors and grantees to engage
women, minority, and disabled veteran business enterprises
in subcontracts in all categories that provide
subcontracting opportunities including renewable energy.
Tracking procurement by each company and in each category
has helped inform development of plans and goals. By
adding a definition of renewable energy, this bill
clarifies applicability of procurement for renewable energy
providers.
ASSEMBLY VOTES
Assembly Floor (73-0)
Assembly Utilities and Commerce Committee
(11-0)
POSITIONS
Sponsor:
Author
Support:
None on file
Oppose:
None on file
Jacqueline Kinney
AB 2760 Analysis
Hearing Date: June 23, 2014