Law Linking Utility Mergers, Minority Hiring Urged

A coalition representing California minority and women’s groups Wednesday urged a congressional panel to propose a federal utilities law that would base merger approvals on the utilities’ records in hiring and promoting minorities and women.

Sharply criticizing the records of the state’s largest utilities, the coalition urged a law similar to the 1977 Community Reinvestment Act, which has forced banks seeking to merge with other banks to justify their employment practices and service to minority and low-income communities. The coalition was among some 90 community groups that used the banking law as leverage in obtaining sweeping new programs for minorities and low-income groups from California First Bank while the bank’s acquisition of Union Bank was pending.

Now is the time to act on a utilities law because the nation’s 140 investor-owned utilities are expected by experts to shrink to fewer than 40 in the current atmosphere of “merger mania” sweeping corporate America, said Robert Gnaizda, an attorney representing the coalition of Asian, black, Latino and women’s groups. Such mergers would require the approval of several federal agencies, he noted.

The House Education and Labor subcommittee on employment opportunities hearing in City of Commerce was chaired by Rep. Matthew G. Martinez (D-Monterey Park).

Witnesses presented a litany of alleged lapses committed by the state’s utilities, particularly Southern California Edison, whose parent has proposed a $2-billion acquisition of San Diego Gas & Electric.

Edison’s management is “the largest all-white club in the state of California subsidized by ratepayers,” he said. Of 275 managers who earn $75,000 or more annually, he said, only seven are minorities, a vast under-representation of minorities in the Southland. Edison, he added, has awarded less than one-half of 1% of its contracts to blacks, less than 1% to Asians and “just 2%” to Latinos.

Robert A. Hine, Edison’s manager of equal opportunity, said the company is proud of its affirmative action record, “though we are quick to acknowledge that much remains to be done.” He said Edison just selected two Asian and two black firms to manage $35 million of its pension funds. Including the $35 million, about 8% of the funds are managed by female or minority-owned firms, he said. Moreover, he said, the firm contributes to several female and minority organizations.

Total minority representation at the company has increased to 30.7% from 18.9% in 1977, he said, adding that the company is concentrating on getting minorities and women into the top five layers of management. One problem, he said, is that Edison has had little growth and turnover in its staff.

Gnaizda said the California Public Utilities Commission has refused to examine the employment practices of utilities. But, he said in an interview that the PUC has ruled that the employment and philanthropic practices of Edison are relevant to the proposed merger with San Diego Gas and would be allowable public interest subjects in hearings on the proposed merger.