Utilities Agree to Minority Contract Goals

Six of California’s largest utilities entered into an agreement Friday setting a goal to give 20% of the dollar value of all contracts they award to minority-or women-owned firms within five years.

The agreement, to be administered by the state Public Utilities Commission, was worked out by Assemblywoman Gwen Moore (D-Los Angeles), chairwoman of the Assembly Utilities and Commerce Committee. It comes in answer to the call last October by several civil rights groups for a PUC order to freeze the salaries of top executives at the utilities until progress was made on minority hiring and procurement.

The utilities are Southern California Gas Co., Southern California Edison Co., Pacific Gas & Electric Co., San Diego Gas & Electric Co., Pacific Bell and GTE of California.

At a Los Angeles news conference with officials of the utilities, Moore said she has been assured that the PUC will support the agreement. If implemented, the agreement will mean $1.2 billion in annual business for the firms at the end of the five years. The PUC is expected to adopt the plan at a meeting next week.

The goal is to award three-fourths the amount to minority-owned firms and one-fourth to companies owned by women. A clearinghouse to be funded by the utilities will be established to certify which firms are truly minority- or women-owned. To qualify, the firms will have to be at least 51% owned by minorities or women.

At present, an average of about 7.9% of the dollar value of all contracts awarded by the utilities are with minority- or women-owned businesses.

Called Largest of Its Kind

Robert Gnaizda of the San Francisco law firm of Public Advocates Inc., who represented four civil rights organizations in two hearings on their demands, hailed the agreement as the largest of its kind with any private business in the nation. He said it will vastly encourage the development of more minority and women enterprises.

Gnaizda said the civil rights organizations--the Urban League, the Black Chamber of Commerce, the League of United Latin American Citizens and the American G.I. Forum--will drop their demand for a PUC-ordered freeze on executive salaries at the utilities and will pursue adoption of similar contract goals by other businesses outside the utilities field.

The agreement does have loopholes. The parties involved are permitted to petition the PUC for adjustments in the goals “on the basis of experience” or in cases of “undue hardship or unreasonable expense to a utility.”

But officials of the utilities said Friday that they will take the goals seriously.

“We have every intent of meeting the goals,” said John Hamrick, vice president of administrative services for San Diego Gas & Electric. “It will be difficult. There will be some resistance within our company, we know.”

Hamrick explained that some of the utility’s officials have had longstanding contacts with suppliers and some of these suppliers will be losing business. He said the goals can probably be achieved, but it will not be easy.

‘We Have Hope’

Janice Shields, a director of women and minority programs for Pacific Bell, said, “We support the agreement. Although we feel it’s a stretch, we have hope.”

Phil Martin, senior vice president of corporate and administrative services for Southern California Edison, said Edison has already appointed an ombudsman and hired an outside consulting firm to assist it in locating minority suppliers.

Mary Daniels, analyst of the Equal Opportunity Purchasing Program for Pacific Gas & Electric, said, “PG&E; is committed to this agreement. We will do our best to achieve the goals.”

Marc Christensen, vice president of public affairs for Southern California Gas, said his company endorses the goals and regards them as not unreasonable.

And Tom Leweck, public relations director for GTE of California, whose president, David Anderson, was credited with helping to fashion the final agreement, said his firm is “very comfortable” with the agreement.

Moore, who traveled the state talking to the chief executive officers of the six utilities, said all had agreed to the proposal.

“California leads the nation in the number of minority- and women-owned business,” she said. “The support you see for this document today demonstrates a strong commitment from the heads of each of the largest utility companies that can make California a leader in the participation of these less-advantaged groups in utility contracts. They are to be commended.”

It was legislation successfully authored by Moore in 1986 that mandated that the PUC force utilities to implement programs to encourage, recruit and utilize women and minority business enterprises.