Peevey Comment Dec. Amending General Order 156 and Calling for Workshops

II. GO 156

In 1986, the California Legislature enacted a series of statutes to ensure that a fair proportion of total utility contracts and subcontracts for products and services are awarded to women, minority, and disabled veteran business enterprises (WMDVBE). (See generally Pub. Util. Code §§ 8281-8286.) The purpose of these statutes is to (a) encourage greater economic opportunity for women, minority, and disabled veteran business enterprises; (b) promote competition among regulated public utility suppliers to enhance economic efficiency in the procurement of electrical, gas, and telephone corporations' (and their affiliates') contracts; and (c) clarify and expand the program for the utilities' procurement of products and services from WMDVBE enterprises. (See § 8281(b)(2).)

Consistent with this policy, the Legislature directed the Commission to require certain utilities and their regulated subsidiaries and affiliates¹ to submit annual plans for increasing WMDVBE procurement in all categories of products and services. The Legislature also required the Commission to establish guidelines for the utilities to use in establishing programs pursuant to these statutes. (See § 8283(a) and (c).)

In April 1988, the Commission promulgated GO 156 in order to implement Pub. Util. Code § 8281 et seq. (See Decision (D.) 88-04-057, 28 CPUC2d 36.) GO 156, § 8.2 requires utilities to establish minimum long-term goals for each major category of products and services a utility purchases from outside vendors of not less than 15% for minority owned business enterprises and not less than 5% for women owned business enterprises. The goal for disabled veteran business enterprises is 1.5%, effective January 1, 1997.²

The current version of § 8.5 of GO 156 provides that a utility can create an "excluded category" of products or services where it is clearly evident that WMDVBEs do not provide such services or that sole source procurement is the only available procurement method. The utility has the burden of demonstrating the unavailability of WMDVBEs capable of supplying such products and services and must justify in its annual report the continued existence of any excluded category.³

¹ According to § 8283, these statues apply to electric, gas and telephone utilities with gross annual revenues exceeding twenty-five million dollars and their Commission-regulated subsidiaries and affiliates. ² GO 156, § 8.12 provides that no penalty shall be imposed for failure of any utility to meet or exceed WMDVBE goals. ³ Section 8.5 of GO 156 states: "A utility may create an `excluded category' of products or services where it is clearly evident that WMDVBEs do not provide a specific product or service, or that sole source procurement is the only available procurement method. The utility shall bear the burden of demonstrating the unavailability of WMDVBEs capable of supplying such products or services. Because there may in the future be WMDVBEs capable of supplying products or services in an excluded category, the utility must justify in its annual report the continued existence of any excluded category. Excluded categories must be noted in the utility's annual report to the Commission on WMDVBE program progress and future plans."