BILL ANALYSIS
AB 2758
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Date of Hearing: April 19, 2010
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 2758 (Bradford) - As Amended: April 12, 2010
SUBJECT : Public utilities: procurement.
SUMMARY : Requires each cable television corporation with gross
annual revenues exceeding $25 million, and their
commission-regulated subsidiaries and affiliates, to submit
annual plans for increasing procurement from women, minority,
veteran and disabled veteran business enterprises.
EXISTING LAW :
1)The Public Utilities Code requires each electrical, gas, water
and telephone corporation with gross annual revenues exceeding
$25 million to annually submit a detailed and verifiable plan
to the California Public Utilities Commission (CPUC) for
increasing women, minority, and disabled veteran business
enterprises (W/M/DVBE) procurement in all categories that
includes goals and timetables.
2)Requires the CPUC to establish guidelines for the annual
plans.
3)Requires each electrical, gas, water and telephone corporation
with gross annual revenues exceeding $25 million to furnish an
annual report to the PUC regarding the implementation of
W/M/DVBE programs.
4)The State Constitution prohibits the State from discriminating
against, or granting preferential treatment to any individual
or group on the basis of race, sex, color, ethnicity, or
national origin in the operation of public employment, public
education, or public contracting.
THIS BILL :
1)Requires each cable television corporation with gross annual
revenues exceeding $25 million to annually submit a detailed
and verifiable plan to the CPUC for increasing W/M/DVBE
procurement in all categories that includes goals and
timetables.
AB 2758
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2)Adds "veteran business enterprises" to the list of enterprises
for which electrical, gas, water and telephone corporations
that are required to submit an annual detailed and verifiable
plan to increase procurement.
3)Specifies renewable energy, wireless telecommunications,
broadband, smart grid and rail projects as categories for
which utilities should increase procurement from women,
minority and disabled veteran business enterprises.
COMMENTS : According to the author, the purpose of this bill is
to capture information about the procurement practices of cable
corporations, who to date, have not chosen to voluntarily submit
information about their plans to increase procurement with
minority, women, veteran and disabled veteran enterprises. These
companies maintain a substantial presence in California and like
other utilities should be encouraged to share and improve their
efforts in this area.
1) Background : In 1986, the CPUC adopted General Order 156 (GO
156), which created Women-Owned and Minority-Owned Business
Enterprise (W/MBE) program to increase diversity in various
utility operations and procurement processes. GO 156 requires
PUC-regulated electrical, gas, and telephone corporations with
gross annual revenues exceeding $25 million to submit annual
detailed and verifiable plans that includes short- and long-term
goals and timetables for increasing W/MBE procurement in all
procurement categories.
GO 156 includes rules and regulations for the utilities'
compliance with the W/MBE program, and requires participating
utilities to inform, recruit, and obtain at least 20 percent of
their products and services purchased within a five-year period
from W/MBEs (15 percent from minority-owned businesses and 5
percent from women-owned businesses).
AB 3678 (Moore) Chapter 1259, Statutes of 1986, codified the
broader parameters of GO 156, and requires each electrical, gas,
and telephone corporations (with gross annual revenues exceeding
$25 million) to annually submit a detailed and verifiable plan
for increasing W/MBE procurement in all categories that includes
short- and long-term goals and timetables, and furnish an annual
report. It also required the PUC to establish guidelines for
the plans.
AB 2758
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SB 2398 (Dills) Chapter 516, Statutes of 1990, later included
disabled veteran business enterprises in the classes of entities
eligible under W/MBE programs. A subsequent PUC decision
includes disabled veteran-owned business enterprises (D.
95-12-045) and establishes a 1.5-percent goal for disabled
veteran-owned businesses.
AB 873(Davis) Chapter 316, Statutes of 2008, included water
corporations with gross annual revenues of more than $25 million
in the requirement to annually submit a detailed and verifiable
plan to the CPUC for increasing W/M/DVBE procurement in all
categories and to submit an annual report on the results of that
plan.
2) Should cable companies be included: CPUC jurisdiction of
cable television corporations is limited to the issuance of
state video franchises for the provision of video. The Digital
Infrastructure and Video Competition Act of 2006 created this
jurisdiction, which includes approving applications, enforcing
antidiscrimination and build-out rules, and preventing the use
of stand-alone, residential, primary line, and basic phone
service revenues from being used to pay for deployment of video
infrastructure. This jurisdiction, however, does not include
oversight over cable television services or operations.
While cable corporations may not be regulated by the CPUC, the
state, as well as the federal government, has placed priority on
the expansion of broadband particularly in rural and underserved
communities. Also, this bill includes an expansion to the
reporting requirements of publicly regulated utilities to
include broadband in their M/W/DVBE procurement plans. Due to
the fact that cable companies have and continue to make
significant infrastructure investments in this area, it may be
in the state's best interest to have a clearer understanding of
the priorities within those corporations for a contracting
process that incorporates diversity.
3) Why include veterans: The California Disabled Veteran
Business Enterprise Program was established to address the
special needs of disabled veterans seeking rehabilitation and
training through entrepreneurship and to recognize the
sacrifices of Californians disabled during military service.
Section 999 of the Military and Veterans Code defines a disabled
veteran as "a veteran of the military, naval, or air service of
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the United States, including, but not limited to, the Philippine
Commonwealth Army, the Regular Scouts, 'Old Scouts', and the
Special Philippine Scouts, 'New Scouts,' who has at least a
10-percent service connected disability and who is domiciled in
the state."
According to the PUC "Year 2008 Utility Procurement of Goods,
Services and Fuel from Women, Minority, and Disabled Veteran
Owned Business Enterprises" report to the Legislature, 29
utilities filed annual reports with the CPUC, however only 0.25%
of the total 1.5% target goal for DVBE procurement was achieved.
In response, some utilities hosted events for disabled veterans
aimed at encouraging entrepreneurship and contracting
opportunities.
According to the sponsor of the bill, tens of thousands of men
and women in uniform returning from Iraq and Afghanistan who are
becoming more engaged in the emergence of the green economy, are
not able to be captured in the target 1.5% goal of DVBE
procurement with utilities. By expanding GO 156 to include
veterans, the bill allows for the reporting of veteran owned
business and their potential impact in the emerging green
economy.
4) Highlighting projects: AB 2758 specifies that renewable
energy, wireless telecommunications, broadband, smart grid and
rail projects should be projects of focus for utility
procurement with M/W/DVBE. However, it can be deduced that
because GO 156 applies directly to utility activities and
encourages compliance through prime contractors and
subcontracts, diversity compliance should be reflected in annual
procurement reports as utilities begin to authorize and contract
for these projects.
5) Smart grid: Last year, SB 17 (Padilla) Chapter 327 Statutes
of 2009 required the CPUC, in consultation with the CEC and the
CAISO to determine the requirements for a smart grid deployment
plan and adopt standards and protocols to ensure functionality
and interoperability developed by public and private entities by
July 1, 2010. Due to the fact that the CPUC has not finished
its work and because smart grid operators are bound by this
provision for any distribution or transmission grid
improvements, the author may wish to delete the reference to
smart grid from the bill.
AB 2758
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6) Related Legislation: AB 1918 (Davis) requires each "wireless
communications service provider" with gross annual revenues
exceeding $25 million to meet the same W/M/DVBE procurement
requirements which are placed on electrical, gas, water, and
telephone corporations.
REGISTERED SUPPORT / OPPOSITION :
Support
American GI Forum of California
Asian Business Association
Black Business Association
Black Economic Council (BEC)
CHARO Community Development Corporation
Economic Business Development, Inc. (EBD)
Greenlining Institute (Sponsor)
Hispanic Chamber of Commerce Alameda County
Latino Business Chamber of Greater Los Angeles
Mabuhay Alliance
National Association of Filipino American Associations
OurWeekly
TELACU
Opposition
California Cable & Telecommunications Association (CCTA)
Analysis Prepared by : Camille Wagner / U. & C. / (916)
319-2083