COM/CXW/mnt Mailed 12/20/04

Decision 04-12-056 December 16, 2004

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on the Commission's own motion for the purpose of considering policies and rules governing utility construction contracting processes.

Rulemaking 03-09-006 (Filed September 4, 2003)

ORDER ADOPTING RULES FOR UTILITY CONSTRUCTION CONTRACTING

1. Summary

This order adopts certain policies and practices for utility construction contracting procedures. Specifically, this order prohibits the use of "reverse auctions" in energy utility construction contract bidding procedures, a practice in which bidders compete for contracts by lowering their bids until the lowest bid is accepted. The order also requires respondent utilities to ensure the payment of prevailing wages by their construction contractors in all construction. We do not at this time address the use of "Project Labor Agreements" (PLAs) by the jurisdictional utilities.