Americans are used to handouts for favored groups. Affirmative action in university admissions, corporate \u201cdiversity\u201d initiatives, and minority-owned contracting requirements direct opportunities, resources, and contracts to supposedly \u201coppressed\u201d groups, such as women, Native Americans, blacks, and Hispanics.<\/p>\n
In California, state Democrats have embraced another kind of favoritism: contracts for state-certified gay-owned businesses.<\/p>\n
Finally, a reason to check your email.<\/p>\n
Sign up for our free newsletter today.<\/p>\n
The scheme operates through the California Public Utilities Commission (CPUC), which regulates<\/a> privately owned utility companies. California utilities spent<\/a> more than $43 billion in 2024 on contractors\u2014fuel suppliers, surveyors, engineers, and others\u2014whose work helps deliver water, gas, electricity, and internet service to California\u2019s 39 million<\/a> residents.<\/p>\n In 1986<\/a>, Governor George Deukmejian signed<\/a> Assembly Bill 3678, which required <\/a>certain CPUC-regulated utilities to submit annual \u201cplans\u201d for buying goods and services from woman- and minority-owned companies. Two years later, CPUC created <\/a>its \u201cSupplier Diversity Program,\u201d which would enforce the law and set contracting \u201cgoals\u201d for large utilities.<\/p>\n Under a series of Democratic governors, the program has expanded to include gay-owned businesses. In September 2014, then-Governor Jerry Brown signed<\/a> legislation requiring CPUC to recognize \u201cLGBT-owned businesses\u201d as eligible<\/a> for supplier-diversity benefits. Five years later, Governor Gavin Newsom expanded<\/a> the program further, \u201cencouraging<\/a>\u201d other companies involved in the energy sector to award contracts to gay-owned firms.<\/p>\n In the years that followed, CPUC faced activist pressure as it implemented the gay expansion. BuildOUT California, a since-rebranded LGBT building-industry organization, sent a letter<\/a> to the commission arguing that \u201chomophobia\u201d existed within \u201cthe ranks of the utility companies.\u201d The state\u2019s legislative LGBTQ caucus suggested in a 2021 letter<\/a> that even considering lower gay-procurement targets was \u201can insult to the LGBTQ+ community.\u201d<\/p>\n By 2022, CPUC had fully implemented the expansion. In practice, this meant establishing a \u201cgoal<\/a>\u201d for utility companies with annual revenues exceeding<\/a> $25 million to buy things from state-certified LGBT businesses: 0.5 percent of procurement in 2022; 1 percent in 2023; and 1.5 percent in 2024 and beyond<\/a>. If \u201clarge<\/a>\u201d CPUC-regulated utilities met these \u201cgoals\u201d in 2024, they would have sent roughly<\/a> $633 million to LGBT-owned firms.<\/p>\n This scheme raises an obvious question: How does a business qualify as officially gay? Paperwork. Supplier Clearinghouse, a group that certifies<\/a> firms for the CPUC program, features a list<\/a> of qualifications linked on its website. Applicants can secure certification by providing a letter from an \u201cLGBT organization\u201d attesting to their sexual preferences; proof that a newspaper identified them as \u201cLGBT\u201d; or three letters from \u201cpersonal contacts\u201d written \u201con company letterhead\u201d attesting to their homosexual orientation. Corporate officials who \u201cfalsely represent\u201d their business as gay face<\/a> up to a year in county jail.<\/p>\n Supplier Clearinghouse also accepts<\/a> gay-certification letters from the National LGBTQ+ & Allied Chamber of Commerce. The chamber has its own list<\/a> of accepted documents, including human resources complaints or police records claiming LGBT discrimination. As NGLCC states<\/a> on its website, \u201cCertification is a journey, not a destination.\u201d<\/p>\n Mary Ann Horton has experienced this \u201cjourney\u201d firsthand. Horton, an early internet pioneer credited<\/a> with helping develop the e-mail attachment, is a white male who \u201ctransitioned\u201d and is now married to a woman. Horton\u2019s company, Red Ace, is registered in California as a woman- and LGBT-owned business.<\/p>\n The application process, Horton told City Journal, required \u201ca mess of documentation.\u201d To prove that Red Ace was \u201clesbian-owned,\u201d Horton sent Supplier Clearinghouse a domestic-partner affidavit. To establish that the business was woman-owned, Horton submitted a birth certificate, which had been reissued in Washington State post-\u201ctransition.\u201d To prove transgender status, Horton filed a \u201ctherapist carry-letter,\u201d a document from a medical professional certifying transgender identity.<\/p>\n These designations came with perks. After Red Ace secured these labels, Horton said, San Diego Gas & Electric brought the company on as a part-time cybersecurity contractor. During the hiring process, Horton told us, a company official said that being on the diversity list made the contract much easier to secure.<\/p>\n \u201cIf I was a straight, white male, I might be concerned I don\u2019t have the same opportunity,\u201d Horton said. \u201cIt worked out great for me.\u201d<\/p>\n LGBT-owned companies in California play other roles. In 2022, SDG&E spent<\/a> $8.6 million, or 0.36 percent of procurement, on LGBT businesses, apparently including<\/a> one that produced<\/a> a training video on supplier diversity. \u201cNever fear when your Ambassador for Excellence is here,\u201d an animated character says in the video. \u201cI can show you exactly how to source diverse vendors.\u201d Other certified LGBT businesses in California include<\/a> a sign-language interpreter, a kombucha maker, and a \u201ccoaching\u201d firm whose services include a \u201cseries\u201d to help people \u201cmanage\u201d their feelings about \u201c[t]he latest election cycle.\u201d<\/p>\n In California, preferential public contracting is technically illegal. In 1996, voters approved<\/a> Proposition 209, which banned the state from granting preferential treatment based on race, sex, or ethnicity in public employment, education, and contracting. More than two decades later, in 2020, they rejected<\/a> an effort to repeal the ban.<\/p>\n CPUC\u2019s arm-twisting regulations violate the spirit of the law. The commission lists several specific \u201cgoals<\/a>\u201d for utilities\u2019 contracting rates: 15 percent to minority-owned firms; 5 percent to women-owned firms; 1.5 percent to disabled-veteran-owned firms; and, most recently, 1.5 percent to LGBT-owned firms. It claims<\/a> that these goals<\/a> are not a \u201crequirement\u201d or \u201cquota.\u201d In practice, however, the agency cajoles utilities into compliance by requiring them to collect extensive demographic data, submit detailed annual reports, list their plans for increasing procurement from favored groups, and explain \u201cany circumstances that may have resulted in not meeting\u201d their procurement \u201cgoals.\u201d<\/p>\n Despite the commission\u2019s efforts, however, utilities and businesses don\u2019t seem interested in LGBT certification. Large utilities\u2019 procurement with LGBT-owned businesses decreased<\/a> by 5 percent in 2024. Supplier Clearinghouse lists 3,750 Minority Business Enterprises, but only 451 LGBT-certified<\/a> firms.<\/p>\n CPUC did not respond to our request for comment by deadline.<\/p>\n The state imposed these rules based on the view that government spending should not merely purchase goods and services, but should also engineer social outcomes. Under this framework, buying a hammer from a firm owned by a black transgender lesbian has more social value than buying the same hammer from a firm owned by a straight white man.<\/p>\n But Californians don\u2019t need an energy system delivered by gay contractors; they need an energy system that works. Utility regulators should be in the business of regulating utilities, not verifying contractors\u2019 sexual preferences. Companies should award contracts based on competence, quality, and cost\u2014not the sexuality of the business owners.<\/p>\n","protected":false},"excerpt":{"rendered":"Americans are used to handouts for favored groups. Affirmative action in university admissions, corporate \u201cdiversity\u201d initiatives, and minority-owned…\n","protected":false},"author":2,"featured_media":363231,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[7,9,8],"class_list":["post-363230","post","type-post","status-publish","format-standard","has-post-thumbnail","category-california","tag-california","tag-california-headlines","tag-california-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/363230","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=363230"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/363230\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/363231"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=363230"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=363230"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=363230"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}