Maryland Public Service Commission looking at mandating support of

Daily Record, The (Baltimore), Jul 16, 2008 by Anne Riley

Since 1993, a Memorandum of Understanding between the Maryland Public Service Commission and several investor-owned utilities has encouraged -- but not mandated --support of minority-owned businesses in Maryland.

However, a Tuesday forum on the issue sponsored by the PSC may have been the first step toward stricter rules -- or even legislation requiring supplier diversity, said state Sen. Nathaniel J. McFadden.

"Discussions will be ongoing with looking at best practices," McFadden, a Democrat from Baltimore, said in an interview. "We hope the industry will come together and do what's right. If not, we'll have to legislate."

The 1993 agreement, which stipulates that utilities take efforts to inform Minority Business Enterprises of procurement opportunities, provide general information to MBE contractors on the range of bids in the event of an unsuccessful bid and submit an annual report to the PSC, includes no incentives or penalties to encourage utilities to grow their MBE contract efforts.

"In Maryland, we look at the plans, but there are no incentives for meeting or not meeting the goals laid out," said PSC Chairman Steven Larsen.

To begin to understand possible models for a stricter MBE support program, the commission heard testimony Tuesday from a number of California-based and national utilities that award a high percentage of bids to minority-owned companies. In California, a general order requires 15 percent of a utility's purchases to come from minority- owned companies, 5 percent from women-owned companies and 1.5 percent from disabled veteran-owned companies.

"It's obviously an impressive accomplishment and something we look forward to here," Larsen said at the forum.

Jose Perez, CEO of the Washington-based National Utilities Diversity Council, said during his testimony that such requirements allow all businesses a chance to be "equally engaged."

The PSC is still in an information-gathering stage and has yet to decide what its next step will be.

Secretary Luwanda Jenkins of the Governor's Office of Minority Affairs suggested at the forum that Maryland aim higher than California's 21.5 percent requirement by implementing a 25 percent MBE goal. Maryland's MBE program, the oldest in the country, sets a goal of at least 25 percent of state contracts to be awarded to minority-owned businesses.

"We think it's ideal that what we do in the public sector influence behavior in the private sector," she said. "This is really all about economic benefits for all businesses in the state of Maryland."

Maurice Bridges, spokesman for Baltimore Gas & Electric Co., said in a Tuesday evening interview that it would be difficult for utility companies to adopt a 25 percent goal like that of the state, or a 21.5 percent goal like that of California, if the commission or the General Assembly were to mandate it.

"I think it would be a stretch to think we could go from where we are today overnight to the 21 percent," Bridges said.

Verizon, which holds the No. 1 spot on DiversityInc magazine's list of top 50 companies for diversity, gave about 15 percent of work in Maryland to MBEs in 2007, according to Sandy Arnette, spokeswoman for Verizon.

"At this time, I really can't say whether a 25 percent state mandate would be possible or present a challenge to our company," she said.