18. Licensing Issues

Issues regarding the licensing of LIEE contractors were raised in this proceeding, in two respects. First, the status of SESCO's contractor's license at the time it submitted a bid under PG&E's PY1998 RFP and commenced work under contract to PG&E was scrutinized during cross-examination and briefing. Second, parties argued over the issue of whether bidders should be fully licensed prior to submitting a bid for PY2000.

Southern California Agencies and other parties argue that SESCO was not properly licensed (i.e., did not possess a class "B" contractor's license) prior to submitting a bid, and therefore won the bid and operated the program illegally. PG&E and Contractors' Coalition refute these contentions.

The RFPs submitted by SoCal, SDG&E, and SCE include the requirement that all bidders have all necessary state and local California contractor's licenses prior to submitting a bid. These utilities contend that this requirement is consistent with the newly enacted AB 1393 and with state contracting laws. Moreover, they argue that program implementation would be delayed by permitting unlicensed contractors to bid. Southern California Agencies and RHA support this position.

Contractors' Coalition argues that contractors with the appropriate state license should be allowed to obtain licenses of local jurisdictions where work is to be done after winning the bid. In Contractors' Coalition's view, it is not always possible to obtain the local licenses prior to bidding, especially if the contractor is to commence work in new localities.

PG&E has not imposed a licensing requirement prior to bidding for the LIEE program in the past, and proposed a similar practice for PY2000. During the course of the proceeding, however, PG&E revised its position and now recommends adding an explicit requirement that all bidders possess a class "B" contractor's license prior to submitting a bid. (See PG&E's Supplemental Opening Brief, p. 2.)

The issue of whether SESCO bid for, obtained and operated the LIEE program under applicable law is squarely and appropriately before the CSLB and the Attorney General's Office. This Commission does not have jurisdiction over contractor licensing issues, and will not address them in this proceeding.

Our priority is to ensure that the LIEE programs go forward uninterrupted, irrespective of what actions may result from the CSLB and Attorney General's investigation. PG&E has been directed to report on its efforts to ensure the uninterrupted delivery of LIEE services to low-income customers, as the licensing investigation proceeds.⁶¹

The purpose of this proceeding is to establish guidelines for LIEE program outsourcing on a prospective basis. For that purpose, we agree with Southern California Agencies and others that all bidders (and LIEE utility contractors in general) should be in good standing with the CSLB, consistent with the provisions of Pub. Util. Code § 327(b)(5).

We direct the utilities to submit reports that demonstrate the good standing of all of their current LIEE contractors and subcontractors with CSLB licensing requirements at the time the contractor or subcontractor:

(1) submitted a bid (if applicable) to win the initial or current contract with the utility or prime contractor, or

(2) commenced work under a negotiated contract that was not subject to competitive bidding.

The utility's report should clearly describe what those licensing requirements are and certify that they have been met by including copies of licenses or other documentation. The reports will be due no later than 120 days from the effective date of this decision should be filed at the Commission's Docket Office in R.98-07-037. Copies of the reports should be served on the state service list and appearances in R.98-07-037 (or any successor proceeding) and in this proceeding.