COM/MP1/gd2 Date of Issuance 5/6/2011

Decision 11-05-019 May 5, 2011

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking for the Purpose of Reviewing and Potentially Amending General Order 156 and to Consider Other Measures to Promote Economic Efficiencies of an Expanded Supplier Base and to Examine the Composition of the Utilities' Workforce.

Rulemaking 09-07-027
(Filed July 30, 2009)

DECISION ADOPTING AMENDMENTS TO GENERAL ORDER 156

DECISION ADOPTING AMENDMENTS TO GENERAL ORDER 156 1 1

1. Summary 2 2

2. Background and Procedural History 4 4

3. The Scope of the Proceeding 7 7

3.1. The Workshops 8 8

3.2. Oral Argument 10 10

3.3. Other Procedural Matters 12 12

4. Post en banc Technical Assistance Proposals and Comments 13 13

4.1. The Joint Utilities Proposal 14 14

4.2. The Two Chambers Joint Proposal 15 15

4.3. BEC/LBCGLA/Mabuhay 16 16

4.4. AICC 17 17

4.5. Greenlining 17 17

4.6. Discussion 18 18

5. Discussion of Other Issues 24 24

5.1. Target Goals and Aspirational Interim Steps 25 25

5.1.1. Discussion 28 28

5.2. Changes to Annual Reporting 31 31

5.3. Prime Supplier Programs 37 37

5.4. Improved Spend in Underutilized Areas 39 39

5.4.1. Legal Services 41 41

5.4.2. Financial Services 42 42

5.4.3. Advertising 43 43

5.4.4. Insurance 43 43

5.4.5. Consulting and other areas 43 43

5.4.6. DVBEs 44 44

5.5. Barriers to Competing 45 45

5.5.1. Discussion 46 46

5.6. Capacity Building-Unbundling Large Contracts and Mentoring 48 48

5.6.1. Large Contracts 48 48

5.6.2. Mentoring 50 50

5.7. Transparency of Procurement and the Bid Process 52 52

5.7.1. Notice of Procurement Opportunities 52 52

5.7.2. Bid Preparation and Feedback 54 54

5.8. Supplier Clearinghouse Activities and Duties 55 55

5.8.1. Business Profiles 56 56

5.8.2. Certification 57 57

5.8.3. Role of the Clearinghouse 58 58

5.8.4. The Clearinghouse Contract 60 60

5.9. Community-Based Organizations 61 61

5.10. Commission Oversight 63 63

5.10.1. Other Commission Actions 64 64

5.10.2. Workshops 64 64

5.10.3. Measuring Success 65 65

6. Conclusion 67 67

7. Comments on Proposed Decision 68 68

8. Assignment of Proceeding 69 69

Findings of Fact 69 69

Conclusions of Law 74 74

ORDER 75 75

ATTACHMENT A - Multi-Tiered Assistance and Capacity Building Program

ATTACHMENT B - Summary of Aspirational Interim Steps Towards GO 156 Target Goals Identified By Reporting Companies

ATTACHMENT C - Amendments to General Order 156

DECISION ADOPTING AMENDMENTS TO GENERAL ORDER 156

1. Summary

General Order (GO) 156 was adopted by the Commission in 1986 to promote greater competition among utility suppliers by expanding the available supplier base and to encourage greater economic opportunity for women, minority, and disabled veteran owned businesses historically left out of utility procurement. The six largest reporting companies covered by GO 156 have vibrant outreach programs to increase participation by small and diverse businesses, and have exceeded GO 156's initial target goals. Other companies have had much less success.

This decision is the result of nearly two years of avid engagement by the Commission and its supplier diversity program staff, utility companies subject to GO 156 reporting, community groups, and diverse businesses. The rulemaking undertook an assessment of current utility supplier diversity programs, including community-based views of their successes and failures, with the goal of recommending actions by the parties and amendments to GO 156 that would improve results. The parties thoroughly aired their views, enhanced their working relationships, and committed to working together better than ever before to achieve the aims of GO 156.

In this decision, the Commission strongly reaffirms its support of the policy goals of GO 156, particularly the economic benefits to ratepayers and communities. In an effort to enhance the transparency and accountability of existing utility supplier diversity programs, the decision makes several amendments to GO 156. These amendments require: (1) electronic filing of the GO 156 annual reports, (2) posting of the reports on the Commission's website, (3) separate reporting of electric procurement spending, (4) reporting of the total number of women-, minority-, and disabled veteran-owned businesses enterprises (WMDVBEs) that received direct spend in a reporting period, (5) reporting of amounts spent by utilities on technical assistance, and (6) periodic random audits of the GO 156 reports. Other amendments are made to GO 156 to conform with the statutory changes enacted in Assembly Bill 2758,¹ including the express inclusion of wireless providers (which the Commission believes are already covered as a telephone corporation), reporting of renewable energy procurement and other areas, identification of WMDVBEs with a majority of the workforce in California, and use of the California Department of General Services criteria for Disabled Veteran-owned Business Enterprises.² Furthermore, it amends GO 156 to require annual en banc hearings by the Commission to review with utility executives the program's progress, commitments, and initiatives and to hear community comments.

In addition, the decision makes numerous findings of fact and recommendations about aspects of utility supplier diversity programs, the role of the Supplier Clearinghouse, and activities by community-based organizations and the Commission's Utility Supplier Diversity Program. These findings and recommendations reflect the Commission's review of the parties' positions and may provide a road map to continuing cooperation between all those committed to improvement of utility supplier diversity programs.

¹ Chapter 475, Statutes of 2010.

² This clarifies and affirms existing practice.