BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 865|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 865
Author: Alejo (D), et al.
Amended: 9/1/15 in Senate
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE: 9-2, 7/13/15
AYES: Hueso, Cannella, Hertzberg, Hill, Lara, Leyva, McGuire,
Pavley, Wolk
NOES: Fuller, Morrell
SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/27/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Bates, Nielsen
ASSEMBLY FLOOR: 59-16, 6/2/15 - See last page for vote
SUBJECT: State Energy Resources Conservation and Development
Commission: contracts, grants, and loans: diversity
SOURCE: The Greenlining Institute
DIGEST: This bill requires the California Energy Commission
(CEC) to develop an outreach program to inform women,
minorities, disabled veterans, and lesbian, gay, bisexual, and
transgender (LGBT) individuals of CEC funding programs and
procurement opportunities.
ANALYSIS:
Existing law:
1)Establishes the State Energy Resources Conservation and
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Development Commission, otherwise known as the CEC. (Public
Resources Code §25000 et seq.)
2)Requires the CEC to administer various grants and loan
programs. (Public Resources Code §25412.5)
3)Directs the CEC to oversee much of the state's investments in
clean energy research, clean transportation, and energy
efficiency. (Public Resources Code §§§25007, 25008, 25400)
4)Declares that is the policy of California to aid in the
interests of women, minority, disabled veteran, and LGBT
business enterprises, encourages greater economic opportunity
for these groups and promotes competition among utilities to
procure contracts with diverse businesses. (Public Utilities
Code §8281)
This bill:
1)Requires the CEC to develop and implement an outreach program
to inform potential applicants of CEC loans, grants and
contracts (including women, minority, disabled veteran, and
LGBT business enterprises).
2)Requires that a component of the outreach program include a
process for tracking the diversity of contractors, loan and
grant recipients.
3)Requires the outreach program to include a strategy to inform
and encourage participation of certified women, minority,
disabled veteran, and LGBT business enterprises about CEC
workshops, trainings, and funding opportunities, and to
consider including these enterprises in capacity building
opportunities.
4)Provides that the CEC may consider establishing a Diversity
Task Force to consider and make recommendations about
diversity in the energy industry, including diversity of
corporate governing boards and procurement from diverse
businesses, and addressing and promoting local and targeted
hiring.
Background
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Diversity at the California Public Utilities Commission (CPUC).
Beginning in 1986, the Legislature enacted a series of statutes,
resulting in the CPUC adopting General Order (GO) 156, which
established the Supplier Diversity Program for the purpose of
encouraging greater participation in utility contracts by women
and minority-owned businesses. Disabled veteran-owned business
enterprises were added in 1990, and in 2014, LGBT business
enterprises were added through statute.
GO 156 currently applies to regulated utilities including
electrical, gas, water, wireless telecommunications service
providers, and telephone corporations with gross annual revenues
over $25 million including CPUC-regulated subsidiaries and
affiliates. These regulated entities must participate in the
Supplier Diversity Program. Regulated entities are required to
annually submit a detailed and verifiable plan, with goals and
timetables, for increasing participation from these
aforementioned demographic groups in all categories of
procurement, including technology, equipment, supplies,
services, materials, and construction. Although there is no
penalty for failure of a utility to meet its goals, each utility
is required to report annually on its progress. The CPUC, in
turn, is required to make an annual progress report to the
Legislature
Showing signs of success. In March 2014, the CPUC reported that
companies participating in the Supplier Diversity Program
achieved a new record in 2013, procuring approximately $8.5
billion in goods and services from qualified diverse suppliers,
an increase of about $500 million over 2012 procurement.
According to the CPUC, more than 30 companies continue to
participate in the program, including Pacific Gas and Electric,
Southern California Edison, AT&T and several others.
CEC resolution. On April 8, 2015, the CEC adopted a resolution
to implement a policy to reflect the CEC's commitment to
diversity outreach for all its programs, including grants, loans
and procurement opportunities. The resolution notes the unique
ability of the CEC to promote diversity by providing
opportunities for increased participation in CEC programs of
small businesses and women, disabled veteran, minority, and LGBT
owned businesses. AB 865 further bolsters the CEC's efforts by
providing more specificity regarding how the CEC will achieve
and measure its commitment to support more diversity.
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Prior Legislation
AB 2593 (Bradford, 2014) would have required a business
enterprise with gross annual revenues exceeding $25 million
participating in a program administered by the California Air
Resources Board to increase procurement from women, minority,
and disabled veteran business enterprises. The bill was vetoed
by the Governor.
AB 1678 (Gordon, Chapter 633, Statutes of 2014) extended
provisions of the CPUC's Supplier Diversity Program to LGBT
business enterprises.
AB 2758 (Bradford, Chapter 475, Statutes of 2010) required cable
corporations, with gross annual revenues exceeding $25 million,
to annually submit a detailed and verifiable plan for increasing
procurement from diverse businesses. It specified that
renewable energy, wireless telecommunications, broadband, smart
grid and rail projects should be projects of focus for utility
procurement with diverse businesses.
AB 873 (Davis, Chapter 316, Statutes of 2008) required each
water corporation with 10,000 or more service connections to
submit annual plans for increasing procurement from women- and
minority-owned businesses and disabled veteran business
enterprises to encourage each electrical, gas, water, and
telephone corporation that is not required to submit a plan
under current law to voluntarily adopt a plan for increasing
women, minority, and disabled veteran business enterprises
procurement in all categories.
AB 3678 (Moore, Chapter 1259, Statutes of 1986) codified the
broader parameters of GO 156, and required each electrical, gas,
and telephone corporations, with gross annual revenues exceeding
$25 million, to annually submit a detailed and verifiable plan
for increasing diverse business procurement in all categories
that includes short- and long-term goals and timetables, and
furnish an annual report.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee, up to $150,000
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annually to the Energy Resources Program Account (General Fund)
to the CEC for implementation its outreach program.
SUPPORT: (Verified8/31/15)
The Greenlining Institute (source)
American GI Forum
Asian Business Association
Asian Business Association - Inland Empire
Asian Pacific Environmental Network
California Black Chamber of Commerce
City of Oakland
Coalition for Clean Air
Environment California
Environmental Defense Fund
Equality California
Green Technical Education & Employment
National Latina Business Women Association
Natural Resources Defense Council
PolicyLink
Small Business California
Small Business Majority
sustainableSMARTS
West Angeles Community Development Corporation
OPPOSITION: (Verified8/31/15)
None received
ARGUMENTS IN SUPPORT: The Greenlining Institute, the sponsor of
the bill, states: "The CEC provides almost $800 million a year
in funding for clean energy projects, and there are currently no
policies in place to promote diversity in these procurement
pipelines. Small and ethnic businesses must be part of the
clean energy economy if California is to meet its economic and
environmental goals. This is because entrepreneurship is key to
the American Dream, and if we are to build a healthy state
economy, it is vitally important that California's diverse
communities have access to entrepreneurial opportunities.
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"This bill aims to increase the rate of entrepreneurship
opportunities among minorities, women, LGBT-identified
individuals, and disabled veterans. In doing so, this bill
recognizes the demographic shifts of the California marketplace
and helps to nurture the new and next generation of energy
technology leaders.
"AB 865 will help to ensure that the growing clean energy
economy is transparent, competitive, diverse and inclusive of
all Californians."
ASSEMBLY FLOOR: 59-16, 6/2/15
AYES: Achadjian, Alejo, Baker, Bloom, Bonilla, Bonta, Brown,
Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper,
Dababneh, Daly, Dodd, Frazier, Cristina Garcia, Eduardo
Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger
Hernández, Holden, Irwin, Jones-Sawyer, Lackey, Levine,
Linder, Lopez, Low, Maienschein, Mathis, McCarty, Medina,
Mullin, Nazarian, O'Donnell, Olsen, Perea, Quirk, Rendon,
Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone,
Thurmond, Ting, Waldron, Weber, Williams, Wood, Atkins
NOES: Travis Allen, Bigelow, Brough, Beth Gaines, Gallagher,
Grove, Hadley, Harper, Jones, Kim, Melendez, Obernolte,
Patterson, Steinorth, Wagner, Wilk
NO VOTE RECORDED: Chang, Chávez, Dahle, Eggman, Mayes
Prepared by:Nidia Bautista / E., U., & C. / (916) 651-4107
9/1/15 21:30:33
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