2. Procedural Background
The Commission opened this rulemaking to investigate utility contracting processes. Rulemaking (R.) 03-09-006 included two types of contracting procedures that may be problematic. One, called "reverse auctions," solicits bids over the internet and permits bidders to continue to bid until the lowest bid is made. The other, called "bid shopping," occurs where a prime contract solicits subcontractor bids after bids are opened and subcontractors have been designated. Large utilities filed reports regarding their contracting procedures on December 1, 2003. Parties filed initial comments in response to rulemaking questions on December 5, 2003.
At a prehearing conference held in this proceeding and on the basis of the utilities' reports, the parties agreed that "bid shopping" does not appear to be a practice among large California jurisdictional utilities. Some utilities do use reverse auctions for construction contracts. The scoping memo, issued December 29, 2003, affirms that no utility appears to use "bid shopping" procedures but that some use "reverse auctions" over the internet.
The International Brotherhood of Electrical Workers Local 1245, California State Pipe Trades Council, Northern California Mechanical Contractors Association, and the California Plumbing and Mechanical Contractors Association (together, "Labor-Management Parties", or LMPs) jointly filed comments in this proceeding recommending that the Commission adopt a rule limiting the practice of reverse auctions. The LMPs submitted testimony addressing the alleged harms caused by of reverse auctions. SBC California (SBC), Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), Wild Goose Storage, Inc. (Wild Goose), and Lodi Gas Storage (Lodi) submitted testimony or declarations in response to LMP's testimony.
R.03-06-009 made all jurisdictional utilities respondents to this proceeding. Several parties to this proceeding filed motions to be excused as respondents to the rulemaking. The Commission subsequently issued D. 04-04-038, which excused as respondents to this proceeding all water utilities designated as Class B, C, or D and all utilities except independent storage providers with annual California revenues less than $500 million.
On October 5, 2004, another group representing unionized labor, the Southern California District Council of Laborers (SCDCL), filed a proposal that would require jurisdictional utilities to incorporate in their construction contracting procedures the use of Project Labor Agreements (PLAs) and/or the payment of prevailing wages. According to SCDCL, PLAs would establish uniform terms and conditions of employment for employees of contractors that bid on and obtain construction work from the utilities. In addition or in the alternative SCDCL proposes to require utilities to make prevailing wages a condition of a contract for construction work.
Several utilities filed reply comments to the SCDCL's proposals, all of them in opposition. Reply comments generally allege that the proposals are untimely, outside the scope of the proceeding, poor public policy and possibly contrary to state and federal labor laws. Some of the parties' reply comments also complained that the parties had only a limited time to address SCDCL's proposals. Following notice by the Assigned ALJ, numerous parties filed supplemental reply comments on SCDCL's October 5 proposals.
