Because of our name, Greenlining is often mistaken for an environmental organization, and understandably so. I always tell people who ask that we’re not not an environmental organization – while our mission is economic development in communities of color, we believe strongly in environmental justice, in the green economy, and in renewable energy as powerful tools for building equity. Renewable energy is cleaning up our air, it’s creating green jobs, the price is less volatile than fossil fuel prices, and we’ll never run out of fuel for a solar panel or a wind turbine (or if we do, we’ve got WAY bigger problems than all this). California is not only one of the most aggressive states in the country in its push for 50% renewable energy, it’s among the most aggressive bodies politic globally on this issue.
California also does well at boosting diverse small businesses by promoting supplier diversity. Can we bring those two worlds together?
Our utilities typically buy their renewable energy through a Power Purchase Agreement, or PPA. It’s pretty much what it sounds like – an agreement to buy power from a supplier. Utilities commonly get their renewable power this way, and it helps keep prices low for customers. When a utility enters a PPA with the developer, the utility purchases only the power – nothing about the construction of the project is part of the contract.
Contrast this – from a supplier diversity perspective – to the way utilities build their infrastructure (substations, transmission lines, gas pipelines, etc.). Utility companies contract out the vast majority of the work to build infrastructure, and with the utilities’ well-established programs for supplier diversity and established relationships with diverse businesses, large capital projects drive significant spending with diverse businesses.
As I see it, this is the one downside to the way we buy renewable power – renewable energy developers don’t have the same supplier diversity incentives as other kinds of utility contractors do. To date, we have seen no indication from renewable energy industries like solar, wind, and others that they track, much less proactively seek, diversity in their supply chains. This is a missed opportunity for the renewable energy sector, for diverse businesses, and for ensuring that the benefits of California’s green rush reach all of its diverse communities.
Let me be clear, I’m not advocating that we change the way we buy renewable power. But we should find a way to better track and advance diversity in the renewable energy sector. We have taken a step to promote diversity on the “supply” side with AB 865 (2015, Alejo), which directs the California Energy Commission to consider and track diversity in its more than $700 million in annual grants for emerging renewable energy technologies. And we have a strong tool for taking action on the “demand” side in GO 156. As California surges toward a 50% renewable energy portfolio, it’s time to close this policy gap and start working toward greater diversity in our green power.
The Commission is holding its annual hearing on all things supplier diversity tomorrow, and everyone who’s anyone in the world of California utility supplier diversity will be there. I can think of no better place to start the conversation on how we can ensure that California’s growing green economy is also a diverse one.