Conclusions of Law

1. The Commission should prohibit respondent utilities to use reverse auctions for soliciting bids on utility construction contracts.

2. The California Supreme Court has determined that the Commission is within its authority to do all things necessary to promote reliable, safe and low cost utility services. This determination extends to the regulation of utility contracts, labor practices, and managerial conduct.

3. The California Supreme court has recognized the benefits to employees and the public by the use of prevailing wages.

4. The California Supreme Court has found that a state agency is within its discretion to adopt regulations and take affirmative steps to forestall future problems even where there exists no evidence of a past problem.

5. The Ninth Circuit Court has determined that setting minimum wages for private companies constitutes a minimum labor standard that is not preempted by the National Labor Relations Act.

6. The Commission should require that prevailing wages be paid to employees working on utility construction projects.

IT IS ORDERED THAT:

Utilities that are respondents to this proceeding shall not, when soliciting contract proposals for construction projects, engage in the practice of "reverse auctions" over the internet, which permit bidders to anonymously provide successively lower bids in response to the published bids of others. Each utility that is a respondent to this rulemaking shall submit a report no later than July 1, 2006 describing how the adopted prohibition on reverse auctions has affected its construction contracting procedures, costs and population of bidders. Each utility that is a respondent to this proceeding shall require the payment of prevailing

wages to workers who are employed on utility construction projects. Utilities that are respondents to this proceeding shall require that prevailing wages be paid out to employees working on utility construction projects.

This proceeding remains open to consider the issues described herein.

This order is effective today.

Dated ______________, at San Francisco, California.

CERTIFICATE OF SERVICE

I certify that I have by U.S. mail, served to the parties of which an electronic mail address has been provided, a true copy of the original attached Order Adopting Rules for Utility Construction Contracting on all parties of record for proceedings R.03-09-006 or their attorneys of record.

Dated December 2, 2004, at San Francisco, California.

/s/ SUSIE TOY

Susie Toy

NOTICE

Parties should notify the Process Office, Public Utilities Commission, 505 Van Ness Avenue, Room 2000, San Francisco, CA 94102, of any change of address to insure that they continue to receive documents. You must indicate the proceeding number on the service list on which your name appears.

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