{"id":363672,"date":"2026-06-17T02:01:12","date_gmt":"2026-06-17T02:01:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/363672\/"},"modified":"2026-06-17T02:01:12","modified_gmt":"2026-06-17T02:01:12","slug":"cpuc-supplier-diversity-program-shapes-utility-contracting-in-california","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/363672\/","title":{"rendered":"CPUC supplier diversity program shapes utility contracting in California"},"content":{"rendered":"

California Democrats<\/a> have embraced a new form of favoritism: contracts for businesses that are state-certified as being owned by LGBTQ+ individuals.<\/p>\n

The scheme operates through the California Public Utilities Commission (CPUC), which regulates<\/a>\u00a0privately owned utility companies<\/a>.<\/p>\n

In 1986<\/a>, Gov. George Deukmejian signed<\/a>\u00a0Assembly Bill 3678,which required\u00a0<\/a>certain CPUC-regulated utilities to submit annual \u201cplans\u201d for buying goods and services from female- and minority-owned companies. Two years later, CPUC created<\/a>\u00a0<\/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<\/a>, the program has expanded to include gay-owned businesses. In September 2014, then-Gov. Jerry Brown signed<\/a>\u00a0legislation requiring CPUC to recognize \u201cLGBT-owned businesses\u201d as eligible<\/a>\u00a0for supplier-diversity benefits.<\/p>\n

California Democrats have embraced a new form of favoritism: contracts for businesses that are state-certified as being owned by LGBTQ+ individuals. TED SOQUI\/EPA\/Shutterstock<\/p>\n

Under a series of Democratic governors, the program has expanded to include gay-owned businesses. In September 2014, then-Gov. Jerry Brown signed\u00a0legislation requiring CPUC to recognize \u201cLGBT-owned businesses\u201d as eligible\u00a0for supplier-diversity benefits. Getty Images<\/p>\n

Five years later, Gov. Gavin Newsom expanded<\/a>\u00a0the program, \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 LGBTQ+ expansion. BuildOUT California, a since-rebranded LGBT building-industry organization, sent a letter<\/a>\u00a0to 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>\u00a0that even considering lower 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>\u00a0$25 million to buy things from state-certified LGBTQ+ businesses: 0.5% of procurement in 2022; 1% in 2023; and 1.5% in 2024 and beyond<\/a>.<\/p>\n

\t\t\t\t\t\t\tSign up for the California Morning Report newsletter\t\t\t\t\t\t<\/p>\n

\n\t\t\t\t\t\t\tCalifornia’s top news, sports and entertainment delivered to your inbox every day.\t\t\t\t\t\t<\/p>\n

\t\t\t\t\t\tThanks for signing up!\n\t\t\t\t<\/p>\n

This scheme raises an obvious question: How does a business qualify as officially gay? <\/p>\n

Paperwork. Supplier Clearinghouse, a group that certifies<\/a>\u00a0firms 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>\u00a0gay-certification letters from the National LGBTQ+ & Allied Chamber of Commerce. The chamber has its own list<\/a>\u00a0of accepted documents, including human resources complaints or police records claiming LGBT discrimination. As NGLCC states<\/a>\u00a0on its website, \u201cCertification is a journey, not a destination.\u201d<\/p>\n

Five years later, Gov. Gavin Newsom expanded\u00a0the program, \u201cencouraging\u201d other companies involved in the energy sector to award contracts to gay-owned firms. Getty Images<\/p>\n

LGBT-owned companies in California play other roles. In 2022, San Diego Gas & Electric (SDG&E) spent<\/a>\u00a0$8.6 million, or 0.36% of procurement, on LGBTQ+ businesses, apparently including<\/a>\u00a0one that produced<\/a>\u00a0a 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<\/p>\n

Other certified LGBTQ+ businesses in California include<\/a>\u00a0a 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>\u00a0Proposition 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, voters rejected<\/a>\u00a0an effort to repeal the ban.\u00a0<\/p>\n

Download The California Post App, follow us on social, and subscribe to our newsletters <\/p>\n

California Post News: Facebook<\/a>, Instagram<\/a>, TikTok<\/a>, X<\/a>, YouTube<\/a>, WhatsApp<\/a>, LinkedIn<\/a>
California Post Sports Facebook<\/a>, Instagram<\/a>, TikTok<\/a>, YouTube<\/a>, X<\/a>
California Post Opinion<\/a>
California Post Newsletters: Sign up here!<\/a>
California Post App: Download here!<\/a>
Home delivery: Sign up here!<\/a>
<\/a>Page Six Hollywood: Sign up here!<\/a><\/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% to minority-owned firms; 5% to women-owned firms; 1.5% to disabled-veteran-owned firms; and, most recently, 1.5% to LGBT-owned firms.<\/p>\n

CPUC claims<\/a>\u00a0that these goals<\/a>\u00a0are 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\u00a0<\/p>\n

Despite the commission\u2019s efforts, however, utilities and businesses don\u2019t seem interested in LGBTQ+ certification. Large utilities\u2019 procurement with LGBTQ+ businesses decreased<\/a>\u00a0by 5% in 2024. Supplier Clearinghouse lists 3,750 Minority Business Enterprises, but only 451 firms certified as LGBTQ+<\/a>.<\/p>\n

CPUC did not respond to our request for comment by deadline. Dexon Dee \u2013 stock.adobe.com<\/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 determined by sexual orientation; they need an energy system that works. Utility regulators should be in the business of regulating utilities, not verifying contractors\u2019 sexual preferences. <\/p>\n

Companies should award contracts based on competence, quality, and cost \u2014 not the sexuality of the business owners.<\/p>\n

Christopher F. Rufo<\/a>\u00a0is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and the author of America\u2019s Cultural Revolution<\/a>. Austen Hufford<\/a>\u00a0is a senior investigative reporter at City Journal.<\/p>\n

\t\t\t\t\t\t