A new law, believed to be the first of its kind in the nation, was recently signed by California’s governor and opens the door to additional business opportunities for certified Lesbian, Gay, Bisexual and Transgender (LGBT)-owned businesses in the state.

Assembly Bill 1678, authored by Assemblyman Rich Gordon of Menlo Park, and supported by the National Gay & Lesbian Chamber of Commerce and Southern California Edison (SCE), incorporates LGBT-owned business enterprises into utility supplier diversity programs. 

Since 1988, the California Public Utilities Commission has required the state’s regulated utilities to operate supplier diversity programs designed to increase procurement from women, minority and service disabled veteran-owned business enterprises.

“It is time for the LGBT community to establish equal footing with other minority-owned businesses to create a more inclusive and equitable system,” said Gordon. “AB 1678 is not just about equality — it is also about equity. It is important to recognize the contributions businesses, large and small, have on California’s economy.”

Starting next year, AB 1678 will extend the benefits of California’s utility supplier diversity programs to certified LGBT-owned enterprises.

The contracts with utilities offer significant opportunities and often large dollar amounts. Now in its 35th year, SCE reported in March that through its Supplier Diversity program, the company has spent $13 billion with diverse firms.

The National Gay & Lesbian Chamber of Commerce advocated for the measure and worked with its seven local affiliate chambers in California to try to get the historic measure enacted, which they hope will benefit hundreds of California businesses.

"Gov. Brown has further added to his impressive record on economic development and LGBT issues with his signing of this bill into law,’ said Justin Nelson, co-founder and president of the National Gay & Lesbian Chamber of Commerce. “We also are grateful for the wide support of this law from diverse business communities and the unwavering and consistent support from AT&T and Southern California Edison.”

Many of the businesses the chamber represents want a share of the utilities’ spending each year. One example of that spending is SCE’s program, which in 2013 executed more than $1.4 billion (41 percent of total purchases) in transactions with more than 800 women, minority and service disabled veteran-owned business enterprises. The utilities commission’s current goal is that 21.5 percent of total procurement be conducted with diverse suppliers. 

“Our work in 2013 builds on the program and in the last two years we have demonstrated that it’s sustainable,” said Joe Alderete, SCE’s director of Supplier Diversity and Development. “We’ve reached our aspirational goal of reaching 40 percent of our spending with diverse suppliers two years ahead of schedule.”

In supporting Assembly Bill 1678, SCE believes there is a need to remove barriers to inclusion and participation by diverse groups that have historically been disadvantaged economically.

“SCE has a proud tradition of supporting diversity and inclusion and embracing all communities,” said Douglas Bauder, SCE’s vice president of Operational Services and chief procurement officer. “We hope that our support for this measure helps to expand economic opportunities in our service territory and across the industry.”

The bill could serve as a possible model for similar legislation covering other highly regulated industries in California and other states.