Utilities tout supplier diversity programmes

Coming on the heels of February’s Black History Month and in recognition of March’s Women’s History Month, utilities are making announcements and touting success in embracing diversity in their supply chains.

It’s important to keep in mind that while electric distribution utilities supply energy to customers all over the world, they do not manufacture any of the equipment essential to perform that crucial and life-dependent activity. Further, much of the work they do is outsourced to contractors.

Now, in light of President Biden’s Infrastructure Investment and Jobs Act and Inflation Reduction Act, both of which emphasise the importance of energy justice, prevailing wages and apprentice programmes, utilities are spending more time thinking about not only the diversity, equity, and inclusion (DEI) aspects of their own organisations, but they are also considering how to ensure that the companies they purchase equipment from and the contractors they use are a reflection of the diverse populations they serve.

While this type of DEI focus is likely taking place to some extent in every utility, below are a few highlights from recent announcements.

San Diego Gas and Electric

San Diego Gas & Electric (SDG&E) said that $964 million of the $2.4 billion it injected into the economy in 2022 went to diverse suppliers, representing 39.75% of the total expenditures. This exceeds the 22% goal set by the California Public Utilities Commission (CPUC).

Approximately 87% of SDG&E’s diverse suppliers are located in California, helping to grow the state’s economy, which currently is the fourth largest in the world, said the utility.

Here is a breakdown of SDG&E’s 2022 spending by diverse business categories:

• Minority Business Enterprise (MBE): $467.2 million or 19.26%
• Women Business Enterprise (WBE): $394.3 million or 16.26%
• Disabled Veteran Business Enterprise (DVBE): $94 million or 3.87%
• Lesbian, Gay, Bisexual, Transgender Business Enterprise (LGBTE): $8.6 million or 0.36%

“Through our supplier diversity programme, we are achieving multiple goals at the same time: growing our regional economy, expanding opportunities for small and diverse businesses, while building climate resilient energy infrastructure and advancing regional state climate goals to become net zero,” said SDG&E CEO Caroline Winn. “Our diverse suppliers have been instrumental in our ongoing work to build a safer, more climate-resilient energy future.” 

Details and highlights on suppliers and diverse spend categories can be found in SDG&E’s newly release annual supplier diversity report.

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Exelon

Exelon spent more than $2.8 billion in 2022 with businesses owned by people of color, women and veterans, according to a company press release issued on March 9. The number represents 39% of total enterprise-wide spend.

Encouraging supplier diversity

In 2022, Exelon’s efforts to support the growth and development of local diverse suppliers included:

• The Exelon Foundations Program, a capacity-building programme designed to grow minority businesses in Exelon’s footprint through partnerships with affiliates of the National Minority Supplier Development Council, including the Eastern Minority Supplier Development Council and the Capital Region Minority Supplier Development Program.
• The Empowerment Academies is a diverse supplier development programme designed to educate and coach diversity-certified businesses on how to compete for contract opportunities, as well as provide direct access to Exelon leaders who are committed to growing diverse partnerships. Thirty-seven local businesses are participating in this year’s Empowerment Academies programme.

Training and education programmes

Exelon serves ethnically diverse metropolitan areas – including Baltimore, Chicago, Washington, D.C., and Philadelphia. The company has developed several programmes and initiatives to ensure that its supplier base, as well as its workforce and culture, reflect the diversity of its customers and communities. Programmes include:

The HBCU Scholars program, which provides students who attend historically Black colleges and universities (HBCU) with four years of scholarship assistance, opportunities for summer internships and early career readiness support to help prepare them for rewarding careers at Exelon and within the energy industry.

A $36 million Racial Equity Capital Fund (RECF) helps minority businesses obtain capital to fuel growth and spur job opportunities in communities often overlooked by investors and traditional funding sources.

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The Exelon STEM Academy, a free, weeklong programme introducing young women to careers in STEM for teen girls ages 15-18 from diverse and underserved communities.

As the energy landscape evolves, one of the most important jobs I have as CEO is leading that transformation in a way that is just and equitable,” said Calvin Butler, Exelon president and CEO. “The promise of a clean energy future must be fulfilled for all our communities, especially those that disproportionately suffer the effects of climate change more than others – no one can be left in the dark.”

Evergy

In Kansas City, Missouri, Evergy and consulting company Burns and McDonnell are launching a new programme to help develop supplier diversity. Accelerate, will launch with nearly 40 small and diverse business partners, said the companies. The programme uses a cohort model to strengthen supplier diversity processes, build capacity of diverse suppliers and drive increases in diverse purchases.

Participants will take part in monthly sessions over a six-month period to develop skills to become more competitive in the construction industry, to increase the volume of work their firm can win in open competition, and to improve their firm’s financial strength and capacity. Each participant is partnered with a sponsor from Evergy or Burns & McDonnell to serve as a mentor throughout the programme’s duration.

Training will be led by Ralph Moore, CEO and founder of Ralph G. Moore & Associates (RGMA). Moore was the lead training resource for the National Minority Supplier Development Council (NMSDC) for 24 years. He created the RGMA 5-Levels of Supplier Diversity maturity model and the RGMA 10 Components of a World-Class Supplier Diversity Program, which served as the model for the development of the NMSDC Eight Best Practices. Through Accelerate, participating diverse business owners as well as sponsoring participants from Burns & McDonnell and Evergy will receive instruction in 10 critical strategies that work in sync to drive world-class supplier diversity results. The programme will run until August and will form the basis of a virtual training programme that will expand in 2024, said the companies.

“Innovation creates a demand for new suppliers who can bring fresh ideas to impact the entire value chain,” Moore said. “As corporations focus on building capacity within diverse business sectors, diverse business leaders must be prepared to develop and scale their businesses for large, competitive contracts.”

This was originally published on Power Grid International.