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

V. Exclusions

A. The Proposal

As stated above, the rulemaking proposes to eliminate the exclusions permitted by § 8.5 of GO 156. Specifically, the rulemaking proposes that § 8.5 be amended as follows:

"A utility may no longer create an "excluded category" of products and services for compliance with this General Order. However, the utility may explain in detail in its annual report how its ability to meet its WMDVBE goals are affected because WMDVBEs capable of supplying certain products and services are unavailable, or because sole source procurement is the only available procurement method. The utility may also include a description of any efforts made to find or recruit WMDVBE suppliers of products or services in areas where WMDVBE suppliers are currently unavailable, or where sole source procurement is currently the only available procurement method."

B. Parties' Comments

Greenlining/LIF support the rulemaking's proposal to eliminate exclusions. Greenlining/LIF propose alternative language to the proposed § 8.5 which reorders and clarifies the last two sentences of proposed § 8.5.⁵

Sprint Communications Company L.P., Sprint Telephony PCS L.P., and Sprint Spectrum L.P., as agent for WirelessCo L.P. (collectively Sprint) support the Commission's objective to achieve greater uniformity among utilities in filing their annual WMDBVE reports, and have no objection to eliminating exclusions from GO 156. Similarly, SBC and SBC Advanced Solutions do not oppose eliminating exclusions because they do not use them.

The joint utilities⁶ disagree with eliminating exclusions because they believe exclusions are necessary in order to normalize the reporting results between utility industries. This is so, the joint utilities argue, because utilities in the various industries differ to the extent to which they are required to make purchases within categories where no certified WMDVBE supplier currently exists. The joint utilities believe exclusions should continue in order for the Commission to make appropriate comparisons across industries.

The joint utilities make two recommendations. First, they believe the Commission should work with the utilities and interested parties to develop industry-specific lists of product and service categories that the utilities may continue to exclude from their total WMDFBE calculations, and should periodically review these lists. Second, the joint utilities recommend that the Commission should allow the continued use of exclusions for categories (or subcategories) of products and services that do not appear on the Commission-approved, industry-specific lists of excluded categories, subject to a detailed explanation of the unavailability of WMDVBEs subject to the standard set forth in the current version of § 8.5. The joint utilities believe that a detailed explanation of the unavailability of WMDVBE suppliers would provide more beneficial information than eliminating exclusions. Edison agrees with the joint utilities.

Allegiance Telecom of California (Allegiance) agrees with the joint utilities that the exclusions should not be eliminated because such elimination will add to the obstacles Allegiance faces and will not increase WMDVBE procurement nor heighten public recognition of excellence in achieving the goals of GO 156.

C. Discussion

When the WMDVBE program was established, the Commission emphasized that the permitted exclusions should continue so long as they are truly needed, and required the utilities to justify them annually. While some utilities, such as SBC, have eliminated exclusions, many have not made significant progress over the years toward this goal. Continuing exclusions will not assist in our dual goals of eliminating them, or in standardizing the WMDVBE reports. We, therefore, amend § 8.5 to eliminate them. However, we modify our proposed rule to permit utilities to also report their WMDVBE data with exclusions in the explanatory section in order for a utility to more fully explain why it has not been able to totally eliminate exclusions. We also adopt Greenlining/LIF's proposal reordering sentences and clarifying language.⁷

We do not adopt the joint utilities' proposal to codify into the GO a list of exclusions because we believe this would further institutionalize their existence, rather than assist in eliminating them.

Amended § 8.5 reads as follows:

A utility may no longer create an "excluded category" of products and services for compliance with this General Order. However, for each major category of products and services where the minimum long-term goals required by Section 8.2 are not met, the utility shall include a comprehensive discussion and detailed description of any efforts made to find or recruit WMDVBE suppliers of products or services in areas where WMDVBE suppliers are currently unavailable, or where sole source procurement is currently the only available procurement method. The utility may also explain in detail in its annual report how its ability to meet its WMDVBE goals are affected because WMDVBEs capable of supplying certain products and services are unavailable, or because sole source procurement is the only available procurement method. In this explanatory section, the utility may also include data with exclusions pursuant to former Section 8.5, if such data is necessary to more fully explain why it has not been able to eliminate exclusions, provided that the utility's report must contain the data without exclusions in the first instance.

⁵ Greenlining/LIF's proposed amendment to § 8.5 is as follows:

"A utility may no longer create an "excluded category" of products and services for compliance with this General Order. However, for each major category of products and services where the minimum long-term goals required by GO 156, § 8.2 are not met, the utility shall include a comprehensive discussion and detailed description of any efforts made to find or recruit WMDVBE suppliers of products and services in areas where the utility contends that WMDVBE suppliers are currently unavailable, or where sole source procurement is currently the only available procurement method. The utility may also explain in detail in its annual report how its ability to meet its internal WMDVBE goals are affected because WMDVBEs capable of supplying certain products and services are unavailable, or because sole source procurement is the only available procurement method."

⁶ The Joint Utilities include AT&T Communications of California, Inc., Citizens Telecommunications Company of California, PG&E, PacifiCorp, Roseville Telephone Company, San Diego Gas & Electric Company, Sierra Pacific Power Company, Southern California Gas Company, Southwest Gas Corporation, Verizon, and WorldCom, Inc. ⁷ We also eliminate, rather than amend, § 9.1.7, because the amended language duplicates some of § 8.5's requirements, and the original § 9.1.7 is no longer necessary in light of our amendment to § 8.5. Finally, we amend the following sections of GO 156 to conform them to the amendments we make to § 8.5. The rulemaking included these amendments. The affected sections include: § 1.3.14; § 6.3.3; § 8.8, § 8.10.4; §9.1.7; and § 10.1.4.