The California Public Utilities Commission unanimously approved a voluntary procurement goal for the state's privately owned utilities that will further support issuing contracts to certified lesbian, gay, bisexual and transgender businesses enterprises (LGBTBEs).

As part of its Utility Supplier Diversity Program (General Order 156), the state regulatory agency announced on April 7 that it set a 1.5% aspirational goal for LGBT-owned companies over three years that applies to contracts from California-based privately owned telecommunications, electric and natural gas companies, such as AT&T, PGE and Southern California Edison Co. Aadditional aspirational CPUC goals include 15% for minority business enterprises (MBE), 5% for women business enterprises (WBE) and 1.5% for disabled-veteran business enterprises (DVBE).

Paul Pendergast

Paul Pendergast, president of BuildOut California.

Although the CPUC procurement goals are voluntary, the agency's regulated utilities have consistently met or exceeded utilization goals for MBE, WBE and DVBE firms in reported expenditures on covered business categories. Putting a percentage on the agency's LGBT economic inclusion efforts gives state utilities a tangible target and further sends a message of support, says Paul Pendergast, president of the LGBT construction business advocacy association, BuildOUT California

"Without having a ‘goal’ ... to strive for, one is left to the winds of ‘good faith efforts,’ which have historically proven to yield very low measurable results," he says.

With billions in yearly spending from California utilities, the CPUC's aspirational 1.5% goal could bring an estimated $600 million a year in competitive contracts to 250 LGBT certified enterprises registered in the agency's Supplier Clearing House Database, explains Pendergast. Businesses must be registered in the CPUC's database to qualify as a covered business category spend.

"It is important to note that the number of LGBT firms in the CPUC’s Supplier Clearinghouse Database has continued to drop from their high of just over 400 firms," Pendergast adds. "If a small business does not perceive there is potential for contracts, that business is less inclined to want to go through the certification, or certification renewal process."

Sandra Escalante

Sandra Escalante, owner, Laner Electric Supply

In letter to CPUC's commissioners, California LGBTQ Caucus leaders Evan Low, assembly member, and Sen. Susan Talamantes Eggman said CPUC's directive will help establish "some fairness for LGBTQ businesses that were previously excluded due to discrimination."

Still, LGBTQ contractors face an uphill battle when it comes to winning public and private construction contracts, says Sandra Escalante, owner of the California-based certified LGBTBE, Laner Electric Supply.

"Homophobia still exists whether we want to admit it or not," says Escalante. "Most of my competitors are multibillion-dollar conglomerates and the only chance that I will even be asked to walk through the door and sit at the table is because of goals such as this."

Although a goal "is never a guarantee," Escalante says "at least it gets us involved in the conversation. So it's significant."