BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2758|
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THIRD READING
Bill No: AB 2758
Author: Bradford (D)
Amended: 8/2/10 in Senate
Vote: 21
SENATE ENERGY, UTILITIES & COM. COMMITTEE : 8-2, 6/29/10
AYES: Padilla, Corbett, Florez, Kehoe, Lowenthal,
DeSaulnier, Simitian, Wright
NOES: Dutton, Strickland
NO VOTE RECORDED: Cox
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 53-21, 6/3/10 - See last page for vote
SUBJECT : Public Utilities Commission: regulated
corporations:
procurement
SOURCE : The Greenlining Institute
DIGEST : This bill requires the California Public
Utilities Commission to include in their required report to
the Legislature, the renewable energy, wireless
telecommunications, broadband, smart grid and rail projects
as categories for which utilities should increase
procurement from women, minority and disable veteran
business enterprises, as specified.
ANALYSIS : Current law requires the California Public
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Utilities Commission (CPUC) to require each electrical,
gas, water, and telephone corporation with gross annual
revenues exceeding $25 million to submit annually a
detailed and verifiable plan for increasing women,
minority, and disabled veteran business enterprise (WMDVBE)
procurement in all categories and short- and long-term
goals and timetables for that procurement.
This bill specifies that these procurement categories
include renewable energy, wireless telecommunications,
broadband, smart grid, and rail projects.
Current law requires each electrical, gas, water, and
telephone corporation with gross annual revenues exceeding
$25 million to submit an annual report to the CPUC
regarding implementation of its WMDVBE program.
This bill requires the CPUC to also provide information
which procurements are made with WMDVBEs that have at least
a majority of their workforce in California, in their
required report to the Legislature to the extent that
information is readily accessable.
Current law requires the CPUC to annually report to the
Legislature on the progress of utilities in implementing
their WMDVBE programs.
This bill requires that this CPUC report to the Legislature
include information about which procurements are made with
WMDVBEs that have at least a majority of their workforce in
California.
Current law specifies measures that a utility may consider
to increase its WMDVBE procurement, including amendment of
performance bond requirements when past performance within
a specified area of business justifies that consideration.
This bill specifies that a utility may consider an
amendment to performance bond requirements so that they do
not prohibitively burden WMDVBEs from procuring utility
contracts.
This bill makes legislative findings about the economic
benefits of regulated utilities contracting with women,
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minority, and disabled veteran businesses, especially in
connection with renewable energy, wireless
telecommunications, broadband, smart grid, and rail
projects.
Background
Beginning in 1986, the Legislature enacted a series of
statutes, and the CPUC adopted General Order (GO) 156, to
encourage the award of a fair proportion of all utility
contracts for products and services to WMDVBEs.
Commission-regulated water utilities originally were not
required to participate in the program but were added in
2009. These entities are required to annually submit a
detailed and verifiable plan, with goals and timetables,
for increasing WMDVBE procurement in all categories of
procurement, including technology, equipment, supplies,
services, materials, and construction. A separate annual
report on progress made in meeting those goals also is
required. 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.
GO 156 specifies guidelines for the utilities to follow in
meeting WMDVBE requirements, including the following
procurement goals: Five percent of all procurement from
woman-owned business enterprises; 15 percent from
minority-owned business enterprises, and one-and-a-half
percent for disabled veteran-owned businesses enterprises.
The CPUC is required to adopt criteria for determining
which enterprises count toward these goals. GO 156
requires woman- and minority-owned business enterprises to
be certified by the CPUC's Utility Diversity Supplier
Program clearinghouse, and disabled veteran-owned
businesses enterprises to be certified by the Department of
General Services pursuant to DVBE certification established
under the California Disabled Veteran Business Enterprise
Program. Utilities subject to the WMDVBE requirements are
assessed a charge based on intrastate revenues to support
operation of the clearinghouse.
The CPUC currently has an open rulemaking to review the
impact of GO 156 and its success in encouraging regulated
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utilities to seek the full and fair participation of
WMDVBEs in their procurement programs (R.09-07-027).
The California 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.
According to the CPUC, nothing in GO 156 authorizes or
permits a utility to use set-asides, preferences, or quotas
in administration of its WMDVBE program and utilities
retain the authority to use legitimate business judgment to
select a supplier for a particular contract.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/2/10)
The Greenlining Institute (source)
American GI Forum of California
Asian Business Association
Black Business Association
Black Economic Council
California Black Chamber of Commerce
California Journal for Filipino Americans
California Public Utilities Commission
CHARO Community Development Corporation
Community Union Inc
Economic Business Development, Inc.
Hispanic Chamber of Commerce Alameda County
Inland Empire Latino Coalition
Korean Center, Inc
Latino Business Chamber of Greater Los Angeles
Mabuhay Alliance
National Association of Filipino American Associations
Orange County Black Chamber of Commerce
OurWeekly
TELACU
ARGUMENTS IN SUPPORT : According to the author's office,
emerging industries that are vital to economic recovery
have historically left minority- and women-owned businesses
behind. This bill identifies renewable energy, wireless
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telecommunications, broadband, smart grid, and rail
projects as emerging technologies that utilities should
focus on in their WMDVBE procurement programs. The bill
requires utilities to include these sectors in their annual
plans and goals for WMDVBE procurement that are submitted
to the CPUC. The author's office claims that this will
improve inclusion of WMDVBEs in emerging technology sectors
and demonstrate the contributions of WMDVBEs to these
sectors.
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Bass, Beall, Blakeslee, Block,
Blumenfield, Bradford, Brownley, Caballero, Charles
Calderon, Carter, Chesbro, Coto, Davis, De La Torre, De
Leon, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,
Fuentes, Furutani, Galgiani, Gilmore, Hall, Hayashi,
Hernandez, Hill, Huffman, Jones, Lieu, Bonnie Lowenthal,
Ma, Mendoza, Monning, Nava, V. Manuel Perez, Portantino,
Ruskin, Salas, Saldana, Skinner, Solorio, Swanson,
Torlakson, Torres, Torrico, Villines, Yamada, John A.
Perez
NOES: Adams, Anderson, Bill Berryhill, Buchanan, Conway,
DeVore, Fuller, Gaines, Garrick, Hagman, Harkey, Huber,
Knight, Logue, Miller, Nestande, Niello, Nielsen, Silva,
Smyth, Tran
NO VOTE RECORDED: Tom Berryhill, Cook, Jeffries, Norby,
Audra Strickland, Vacancy
DLW:do 8/3/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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