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California Utilities Must Do More

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The Greenlining Institute of San Francisco released its annual Supplier Diversity Report of private utility companies in California regulated by the California Public Utilities Commission. This report gives out letter grades to companies like a school report card given in public schools to students, from A to double FF. Then in the comment section they make notes on improvements needed or improvements from the last reporting period. It is a great way to keep companies on their toes if they care about their image or if they are serious about the management objectives set by law some twenty years ago. The companies agreed to award at least 15% of their procurement contracts to minority, women and disabled owned companies. Needless to say after 22 years all have fallen short but some are not even trying as identified by the report card.

The overall grade assigned to Verizon is an “A” along with AT&T, San Diego Gas & Electric and Southern California Gas which is owned by Sempa. Receiving a “D” is Edison and PG&E (Pacific Gas & Electric). Coming up with a "F" is Cox Communications and Sprint.

In the detail of the report it is broken down by the disadvantaged groups covered by law and the rule of General Order 156 enacted in 1988 by the California Public Utilities Commission. I am interested in the spending done with the African American group as outlined in the report.

Southern California Gas received an “A” for doing 5.7% business with the African American community; AT&T received a “B” for 5.1%; Verizon received a C for 3.9%; PG&E received a C for 3.7%; San Diego Gas & Electric a “D” for 2.1%; Sprint received a “D” for 2.1% and Edison a “F” for 1.8% which is lower than the last report.

None of them are at parity to what these groups spend in electric or gas payments or in phone bills or cable bills each and every year. Combined the so-called minority population in California is almost 60 percent, yet these companies spend less that 8% combined of rate payer monies with us and even less with African Americans.

Now it is not all their fault but the system of owning the right kind of business to do business with them can be improved by these companies. It starts with employment into the company and then beginning a company supplying the raw materials or services the company needs or uses. I remember the late Al Yzaguirre began his career as a meter reader with Edison and went on to open his electric business. He could not get the people at Edison to give him small contracts even though they were referring other ex-employees’ businesses. The same was true with Mike Darby who started his own business. In my opinion, Blacks and Hispanics who work for these companies are not afforded the same procurement opportunities when they leave or retire.

None of these utility companies produce lawyers yet they contract out for services. None of them own insurance companies yet they contract out with them. None of these companies own food companies yet they contract out for catering services. None of these companies own a public newspaper yet they advertise all the time. They contract with public relations and advertising agencies all the time yet they own none. I cite these services because I know we have some of these businesses in the Black community.

I can attest to Edison, PG&E and Verizon doing some positive things in the Black community and with Black media but it is nothing in comparison to what they spend in other communities. I can also add the Black Press has done some positive things for them such as presenting a positive image at hearings as well has putting on some worthy events for them to partner with, so the relationship is not one sided.

Now while these companies might, and I say might, purchase a table or two at your annual dinner it is nothing compared to the millions they spend at the country clubs or on fishing outings or business conferences with other groups. They have private booths at sporting arenas even sponsor propositions to convince voters to vote.

It is high time that these utility companies take the General Order 156 to heart and put forth every good faith effort to reach this goal of 15% before the public rises up and demands that the spending or procurement opportunities are in line with our population let alone what we spend with them.

They can begin immediately with doing more business with known businesses owned by African Americans.

If you want to read the full report click: http://www.greenlining.org/resources/pdfs/greenlining:st.supplierdiversity2010.pdf

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