Word Document PDF Document

STATE OF CALIFORNIA

Public Utilities Commission

San Francisco

M e m o r a n d u m

Date:

May 18, 2010

   

To:

The Commission

(Meeting of May 20, 2010)

     

From:

Edward Randolph, Director

Office of Governmental Affairs (OGA) - Sacramento

   

Subject:

AB 2758 (Bradford) - Public utilities and cable television corporations: procurement.

As Amended: April 27, 2010

 

LEGISLATIVE SUBCOMMITTEE RECOMMENDATION: SUPPORT

SUMMARY OF BILL:

This bill would require cable corporations to be included as part of the Commission's Utility Supplier Diversity Program. It also adds language to include the procurement of services for regulated public utilities, including but not limited to, renewable energy, wireless telecommunications, broadband, smart grid, and rail projects.

SUMMARY OF SUPPORTING ARGUMENTS FOR RECOMMENDATION:

The Commission supports the bill to include cable corporations as part of the Commission's Utility Supplier Diversity Program. Presently, we are asking the cable companies to voluntarily report their diversity programs. These companies also participated in the Commission's annual diversity en banc in 2009 and are once again invited to attend and participate in the 2010 en banc.

Furthermore, the Commission, in its ongoing rulemaking, has already proposed to include all electric procurement as part of the utilities annual reporting of which renewable energy is one part of.

SUMMARY OF SUGGESTED AMENDMENTS:

None.

DIVISION ANALYSIS (Business & Community Outreach Division):

By adding broadband, by definition cable service (television, high speed internet, and phone service), it would clarify existing law, policy and practice over the cable/broadband industry in the inclusion of those services in the utility supplier diversity program.

The wireless industry is already required to annually report their diversity program achievements and as an industry they continue to comply with the process. The issue is not their reporting, but the fact that they have not met the 21.5% procurement goal.

The language is unclear with regard to regulated utilities procurement of "rail projects". It is not a common practice for the regulated utilities to procure services for rail projects.

PROGRAM BACKGROUND:

In General Order 156, the Commission established voluntary procurement goals for each covered utility of 5% for woman-owned, 15% for minority-owned and 1.5% for disabled veteran-owned business enterprises.  General Order 156 was created over two decades ago to encourage a fair proportion of total utility contracts and subcontracts for products and services to be awarded to women, minority, and disabled veteran business enterprises. The purposes of this statute are to:

LEGISLATIVE HISTORY:

None.

FISCAL IMPACT:

None.

STATUS:

AB 2758 is scheduled to be heard in the Assembly Appropriations Committee on

May 19, 2010.

SUPPORT/OPPOSITION:

STAFF CONTACTS:

Edward Randolph, Director (916) 327-3277 efr@cpuc.ca.gov

Office of Governmental Affairs

Date: May 18, 2010

BILL LANGUAGE:

BILL NUMBER: AB 2758 AMENDED

INTRODUCED BY Assembly Member Bradford

FEBRUARY 19, 2010

An act to amend the heading of Article 5 (commencing with Section

8281) of Chapter 7 of Division 4 of, and to amend Sections 8281,

8282, 8283, 8284, 8285, and 8286 of, the Public

Utilities Code, relating to Public Utilities Commission regulated

corporations.

AB 2758, as amended, Bradford. Public utilities and cable

television corporations: procurement: veterans.

procurement.

(1) Under existing law, the Public Utilities Commission has

regulatory authority over public utilities, including electrical,

gas, water, and telephone corporations, and cable television

corporations, as provided. Existing law directs the commission to

require every electrical, gas, water, and telephone corporation with

annual gross revenues exceeding $25,000,000, and their regulated

subsidiaries and affiliates, to implement a program developed by the

commission to encourage, recruit, and utilize minority-, women-, and

disabled veteran-owned business enterprises, as defined, in the

procurement of contracts from those corporations or from their

regulated subsidiaries and affiliates, and to require the reporting

of certain information. The commission, by rulemaking, adopted

General Order 156, applicable to certain electrical, gas, and

telephone corporations, to effectuate these requirements.

This bill would make cable television corporations with annual

gross revenues exceeding $25,000,000 subject to these requirements

and would require the corporations subject to these

requirements to expand the above programs to include veteran business

enterprises, as defined . The bill would also require the

corporations subject to these requirements to provide information to

the commission about which procurements are made with women,

minority, veteran, and disabled veteran business

enterprises with at least a majority of the enterprise's workforce in

California.

Under existing law, a violation of any provision of the Public

Utilities Act or any rules or orders of the commission is a crime. In

addition, any person or corporation who falsely represents a

business as a woman, minority, or disabled veteran business

enterprise for the purposes of the programs discussed above is

subject to criminal penalties.

Because a violation of the requirements of the bill would be a

crime under those provisions, this bill would impose a state-mandated

local program.

(2) The California Constitution requires the state to reimburse

local agencies and school districts for certain costs mandated by the

state. Statutory provisions establish procedures for making that

reimbursement.

This bill would provide that no reimbursement is required by this

act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes.

State-mandated local program: yes.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. The heading of Article 5 (commencing with Section 8281)

of Chapter 7 of Division 4 of the Public Utilities Code is amended

to read:

Article 5. Women, Minority, Veteran, and

Disabled Veteran Business Enterprises

SEC. 2. Section 8281 of the Public Utilities Code is amended to

read:

8281. (a) The Legislature hereby finds and declares that the

essence of the American economic system of private enterprise is

free, open, and transparent competition. Only through free, open, and

transparent competition can free markets, reasonable and just

prices, free entry into business, and opportunities for the

expression and growth of personal initiative and individual judgment

be assured. The preservation and expansion of that competition is

basic to the economic well-being of this state and that well-being

cannot be realized unless the actual and potential capacity of women,

minority, veteran, and disabled veteran business

enterprises is encouraged and developed. Therefore, it is the

declared policy of the state to aid the interests of women, minority,

veteran, and disabled veteran business

enterprises in order to preserve reasonable and just prices and a

free competitive enterprise, to ensure that a fair proportion of the

total purchases and contracts or subcontracts for commodities,

supplies, technology, property, and services for regulated public

utilities, including, but not limited to, renewable energy, wireless

telecommunications, broadband, smart grid, and rail projects, are

awarded to women, minority, veteran, and disabled

veteran business enterprises, and to maintain and strengthen the

overall economy of the state.

(b) (1) The Legislature finds all of the following:

(A) The opportunity for full participation in our free enterprise

system by women, minority, veteran, and disabled

veteran business enterprises is essential if this state is to attain

social and economic equality for those businesses and improve the

functioning of the state economy.

(B) Public agencies and some regulated utilities which have

established short- and long-range women, minority, and disabled

veteran business enterprise goals are awarding 30 percent or more of

their contracts to these business enterprises.

(C) Women, minority, veteran, and disabled

veteran business enterprises have traditionally received less than a

proportionate share of regulated public utility procurement

contracts, especially in renewable energy, wireless

telecommunications, broadband, smart grid, and rail projects.

(D) It is in the state's interest to expeditiously improve the

economically disadvantaged position of women, minority,

veteran, and disabled veteran business enterprises.

(E) The position of these businesses can be substantially improved

by providing long-range substantial goals for procurement by

regulated public utilities of technology, equipment, supplies,

services, materials, and construction work, especially in renewable

energy, wireless telecommunications, broadband, smart grid, and rail

projects, from women, minority, veteran, and

disabled veteran businesses.

(F) That procurement also benefits the regulated public utilities

and consumers of the state by encouraging the expansion of the number

of suppliers for procurements, thereby encouraging competition among

the suppliers and promoting economic efficiency in the process.

(G) That the long-term economic viability of this state depends

substantially upon the ability of renewable energy, wireless

telecommunications, broadband, smart grid, and rail projects to

incorporate women, minority, veteran, and disabled

veteran businesses into those projects.

(2) It is the purpose of this article to do all of the following:

(A) Encourage greater economic opportunity for women, minority,

veteran, and disabled veteran business

enterprises.

(B) Promote competition among regulated public utility suppliers

in order to enhance economic efficiency in the procurement of

electrical, gas, water, cable television, and telephone corporation

contracts and contracts of their commission-regulated subsidiaries

and affiliates.

(C) Clarify and expand the program for the procurement by

regulated public utilities of technology, equipment, supplies,

services, materials, and construction work from women, minority,

veteran, and disabled veteran business

enterprises.

SEC. 3. Section 8282 of the Public Utilities

Code is amended to read:

8282. For the purposes of this article, the following definitions

apply:

(a) "Women business enterprise" means a business enterprise that

is at least 51 percent owned by a woman or women; or, in the case of

any publicly owned business, at least 51 percent of the stock of

which is owned by one or more women, and whose management and daily

business operations are controlled by one or more of those

individuals.

(b) "Minority business enterprise" means a business enterprise

that is at least 51 percent owned by a minority group or groups; or,

in the case of any publicly owned business, at least 51 percent of

the stock of which is owned by one or more minority groups, and whose

management and daily business operations are controlled by one or

more of those individuals. The contracting utility shall presume that

minority includes Black Americans, Hispanic Americans, Native

Americans, and Asian Pacific Americans.

(c) "Disabled veteran business enterprise" has the same meaning as

defined in Section 999 of the Military and Veterans Code.

(d) "Control" means exercising the power to make policy decisions.

(e) "Operate" means being actively involved in the day-to-day

management and not merely officers or directors.

(f) "Veteran business enterprise" means a business enterprise that

meets the requirements of a "disabled veteran business enterprise"

except that the requirement that the veterans qualifying the business

under this article need not be disabled.

SEC. 4. SEC. 3. Section 8283 of the

Public Utilities Code is amended to read:

8283. (a) The commission shall require each electrical, gas,

water, cable television, and telephone corporation with gross annual

revenues exceeding twenty-five million dollars ($25,000,000) and

their commission-regulated subsidiaries and affiliates, to submit

annually, a detailed and verifiable plan for increasing procurement

from women, minority, veteran, and disabled

veteran business enterprises in all categories, including, but not

limited to, renewable energy, wireless telecommunications, broadband,

smart grid, and rail projects.

(b) These annual plans shall 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, veteran, and disabled veteran business

enterprises in subcontracts in all categories which provide

subcontracting opportunities, including, but not limited to,

renewable energy, wireless telecommunications, broadband, smart grid,

and rail projects.

(c) The commission shall establish guidelines for all electrical,

gas, water, cable television, and telephone corporations with gross

annual revenues exceeding twenty-five million dollars ($25,000,000)

and their commission-regulated subsidiaries and affiliates, to be

utilized in establishing programs pursuant to this article.

(d) Every electrical, gas, water, cable television, and telephone

corporation with gross annual revenues exceeding twenty-five million

dollars ($25,000,000) shall furnish an annual report to the

commission regarding the implementation of programs established

pursuant to this article in a form that the commission shall require,

and at the time that the commission shall annually designate. These

corporations shall also provide information to the commission about

which procurements are made with women, minority, veteran,

and disabled veteran business enterprises with at least a

majority of the enterprise's workforce in California.

(e) The commission shall provide a report to the Legislature on

September 1 of each year, on the progress of activities undertaken by

each electrical, gas, water, cable television, and telephone

corporation with gross annual revenues exceeding twenty-five million

dollars ($25,000,000) pursuant to this article in the implementation

of women, minority, veteran and disabled veterans

business enterprise development programs. The report shall include

information about which procurements are made with women, minority,

veteran, and disabled veteran business enterprises

with at least a majority of the enterprise's workforce in

California. The commission shall recommend a program for carrying out

the policy declared in this article, together with recommendations

for legislation that it deems necessary or desirable to further that

policy.

(f) The Legislature declares that each electrical, gas, water,

cable television, and telephone corporation that is not required to

submit a plan pursuant to subdivision (a) is encouraged to

voluntarily adopt a plan for increasing women, minority,

veteran, and disabled veteran business enterprise

procurement in all categories.

SEC. 5. SEC. 4. Section 8284 of the

Public Utilities Code is amended to read:

8284. (a) The commission shall, by rule or order, adopt criteria

for verifying and determining the eligibility of women, minority,

veteran, and disabled veteran business enterprises

for procurement contracts.

(b) The commission shall develop, and require every electrical,

gas, water, cable television, and telephone corporation with gross

annual revenues exceeding twenty-five million dollars ($25,000,000)

and their commission-regulated subsidiaries and affiliates to

implement, an outreach program to inform and recruit women, minority,

veteran, and disabled veteran business

enterprises to apply for procurement contracts under this article.

SEC. 6. SEC. 5. Section 8285 of the

Public Utilities Code is amended to read:

8285. Any person or corporation, through its directors, officers,

or agents, which falsely represents a business as a women, minority,

veteran, or disabled veteran business enterprise

in the procurement of, or attempt to procure, contracts from an

electrical, gas, water, cable television, or telephone corporation

with gross annual revenues exceeding twenty-five million dollars

($25,000,000), or a commission-regulated subsidiary or affiliate

subject to this article, shall be punished by a fine of not more than

five thousand dollars ($5,000), by imprisonment in a county jail for

not more than one year or in the state prison, or by both that fine

and imprisonment. In the case of a corporation, the fine or

imprisonment, or both, shall be imposed on every director, officer,

or agent responsible for the false statements.

SEC. 7. SEC. 6. Section 8286 of the

Public Utilities Code is amended to read:

8286. In order to facilitate the participation of women-owned

businesses, minority-owned businesses, veteran-owned

businesses, disabled veteran-owned businesses, and small

businesses in contract procurement, any corporation subject to this

article may consider the following measures to include those

businesses in all phases of their contracting:

(a) Timely or progressive payments to those businesses.

(b) An amendment of the performance bond requirements so that bond

requirements of electrical, gas, cable television, and telephone

corporations do not prohibitively burden those businesses from

procuring the corporation's business.

(c) The provision of assistance to those businesses by securing

contract payments to those businesses with letters of credit,

negotiable securities, or other financing arrangements or measures.

SEC. 8. SEC. 7. No reimbursement is

required by this act pursuant to Section 6 of Article XIII B of the

California Constitution because the only costs that may be incurred

by a local agency or school district will be incurred because this

act creates a new crime or infraction, eliminates a crime or

infraction, or changes the penalty for a crime or infraction, within

the meaning of Section 17556 of the Government Code, or changes the

definition of a crime within the meaning of Section 6 of Article XIII

B of the California Constitution.


Top Of Page