LYN/KLM/mel DRAFT Agenda ID# 4077

Quasi-Legislative

Decision DRAFT DECISION OF COMMISSIONER LYNCH

(Mailed 11/16/2004)

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 prohibit the use of "reverse auctions" in utility construction contract bidding procedures, a practice using the internet 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 establish a preference for utilities to include, for construction contracts over $1 million, "Project Labor Agreements" (PLAs) for all employees hired to work under the contract. Utilities that prefer not to use a PLA for a given project shall file at the Commission to demonstrate that a PLA for a given construction or maintenance contract would not provide substantive benefits to the ratepayer.

Phase II of this rulemaking will examine more thoroughly the use of PLAs in the utility context including the establishment of incentives, if appropriate, for the use of PLAs by the covered regulated