California Hispanic Chambers of Commerce demand action in expanding minority supplier participation
Following the results of a new report commissioned by the California Hispanic Chambers of Commerce (CHCC), the organization lambasted California’s Community Choice Aggregators (CCAs) for failing to diversify their contracting with minority suppliers and small businesses.
At the heart of the issue is the Failure to Diversify report’s findings that CCAs contracted with such firms for less than 0.1 percent of its purchases. That means that women, minority, disabled veteran and LGBT owned businesses got less than a $1.2 million cut of $1.2 billion in economic opportunity largely provided to investor-owned energy utilities.
“California is home to the nation’s largest and fastest growing segment of diverse small businesses,” Julian Canete, president and CEO of CHCC, said. “We are extremely concerned at the lack of progress in procurement opportunities for those small businesses as set forth and required by General Order 156, adopted by the CPUC. Despite being a critical part of California’s economic post pandemic recovery, small and diverse owned businesses have missed out on $1.2 billion in contracting opportunities, a situation that is unacceptable and must be remedied now.”
CCAs are a set of energy agencies regulated by the California Public Utility Commission (CPUC) that were first authorized in 2002, following passage of Assembly Bill 117. That bill allowed cities and counties to create their own agencies to procure electricity for individual customers, which then compensate regulated utilities for the costs of electricity transmission and distribution for their customers. California has 14 CCAs currently.
Under CPUC’s own General Order 156, regulated utilities are supposed to establish plans to purchase and report on at least 21.5 percent of each major category of products and services from diverse outside vendors. This requirement for reporting was expanded to CCAs in 2019, but they have clearly lagged behind. By comparison, the state’s four large, regulated utilities contracted with diverse firms for 39 percent of their products and services in 2020 alone.
The CHCC wants the situation remedied immediately, labeling it an abysmal and disconcerting showing. With that in mind, the organization called for G.O. 156’s diverse contracting goal percentage to be extended to CCAs, rather than just its reporting requirement. It also recommended halting any further creation of CCAs until they are able to get on board with California’s diverse small businesses in a meaningful way, and for a public hearing on CCA supplier diversity to be held as a means of garnering feedback and guidance.
“CCA’s have been around for almost 20 years so it was shocking to see supplier diversity outcomes this low,” José Atilio Hernández, chairman of IdeateLABS, a statewide policy think tank that issued the report commissioned by CHCC, said. “As of 2020, California law requires CCA’s to take an initial step toward meeting CPUC requirements to contract with diverse businesses by requiring reporting of outcomes. Now that we see the numbers, it is clear that additional action is required for CCA’s to make meaningful progress toward meeting the state’s equity contracting goals.”
