Utilities Haven’t Met Minority Goals, Coalition Says

Six years after agreeing to award more contracts to minority-owned firms, most of California’s major utilities have failed to meet the minimum purchasing goals established by state regulators, according to a coalition of minority and consumer groups.

Only two major utilities--Southern California Edison and Pacific Bell--out of seven awarded at least 15% of their contracts for supplies and services to minority businesses in 1993, as called for by the California Public Utilities Commission.

“It shows that there is limited commitment by the utilities’ CEOs” to boost business with minority firms, said Robert L. Gnaizda, a lawyer for the Greenlining Coalition, a collection of minority and civil rights groups that released its annual analysis of the minority contracts Wednesday.

However, the goals established by the PUC in 1988 are voluntary and the utilities face no penalties for missing the targets, according to agency officials. The PUC, which will release its own analysis of the 1993 figures by September, also asked the utilities to award at least 5% of contracts to women-owned firms by 1993.

Some of the firms--such as AT&T;, Pacific Gas & Electric, GTE California and Southern California Gas--exceeded the combined target for women- and minority-owned businesses but failed to meet the 15% goal for minority firms.

“We have plans in place to improve those numbers,” said Diane Schwilling, a spokeswoman for AT&T;, which she said intends to boost the dollar amount of contracts to women- and minority-owned firms by 10% annually. In 1993, 11.6% of AT&T;’s California contracts went to minority businesses.

When broken down by minority or ethnic group, the utilities met with different results. San Diego Gas & Electric, for example, awarded 6.9% of its contracts to Latino businesses in 1993, while 4.4% went to African Americans and only 2.2% to Asian Americans.

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Some of the firms took exception with the Greenlining Coalition’s analysis, which excluded Native American-owned firms to which the utilities said they gave contracts. Gnaizda said the coalition did not include the Native American figures because it was concerned that many of those firms had misstated their minority ownership.

“That brings into question his approach here,” said Barbara Cook, minority and small-business manager for Southern California Gas. Cook said the company showed increases in procurement from firms owned by Native Americans, Asian Americans and African Americans in 1993.

Overall, the seven major utilities have boosted minority contracts from about $100 million in 1988 to $700 million last year, Gnaizda said. Despite the dramatic increase, he said, the growth has been too slow and enforcement by the PUC too lax.

To boost the companies’ performance, the Greenlining Coalition has asked the PUC to tie executive compensation to the achievement of the minority contracting goals. In addition, the coalition wants the PUC to require companies to award 30% of all contracts to minority-owned firms by 1999. The PUC said it is studying the proposals.