SDG&E'S SUPPLY CHAIN BOOSTS ECONOMY BY $2.6 BILLION IN 2023

Rhea-AI Summary

SDG&E's procurement program generated $2.59 billion in direct economic impact in 2023, with 43% of total expenditures going to diverse suppliers. The company exceeded CPUC's supplier diversity goal for the 19th consecutive year, showcasing a commitment to economic prosperity and inclusion.

Economist

The economic impact of San Diego Gas & Electric's (SDG&E) procurement program, generating $2.59 billion and contracting with over 2,000 businesses, is significant. The program's focus on diversity, with 43% of total expenditures going to diverse suppliers, aligns with broader economic trends emphasizing inclusive growth. The direct local impact, with $450.6 million spent in San Diego County and $950.7 million in California, suggests a substantial multiplier effect on the regional economy. This effect can stimulate job creation, increase local revenue and foster a more resilient economic environment.

SDG&E's long-term commitment to surpassing the California Public Utilities Commission's (CPUC) supplier diversity goal for 19 years consecutively demonstrates a sustainable approach to corporate social responsibility. This is likely to enhance the company's reputation and could lead to a more favorable regulatory environment, potentially benefiting shareholders. Moreover, by investing in small and diverse businesses, SDG&E may be contributing to innovation and competitiveness, which can indirectly support the company's operational efficiency and growth prospects.

Market Research Analyst

The success of SDG&E's procurement program can be attributed to its strategic engagement with small and diverse businesses, which reflects a growing consumer and investor interest in companies with strong Environmental, Social and Governance (ESG) practices. The involvement with local suppliers, like Rancho Tree Service, indicates a potential competitive advantage for SDG&E in terms of community relations and local brand perception.

Furthermore, the emphasis on diverse suppliers could appeal to a broader customer base and may lead to increased customer loyalty. This procurement strategy, which includes mentoring relationships between primes and subcontractors, could also create a more robust supply chain for SDG&E, reducing risks associated with supplier concentration and enhancing the company's agility in the face of market changes or disruptions.

Sustainability Expert

SDG&E's procurement program is not only a driver of economic growth but also a reflection of the company's commitment to sustainability and social responsibility. By integrating vegetation management services into their Wildfire Mitigation Plan, SDG&E is addressing critical environmental concerns. This initiative, particularly in a state prone to wildfires, underscores the importance of sustainable practices in utility operations.

The engagement of a Minority Business Enterprise as a prime contractor for such services highlights the dual focus on environmental sustainability and social equity. This approach can enhance SDG&E's sustainability profile and potentially attract investors who prioritize responsible environmental stewardship and community engagement in their investment decisions.

Program Expanded Opportunities for Hundreds of Small and Diverse Businesses, Helping to Promote Economic Prosperity

SAN DIEGO, March 13, 2024 /PRNewswire/ -- San Diego Gas & Electric's (SDG&E) procurement program generated $2.59 billion in direct economic impact in 2023, contracting with more than 2,000 businesses for goods and services to deliver on the company's mission to serve the 3.7 million people in its service area with increasingly clean, safe and reliable energy infrastructure.

More than 43% of SDG&E's total expenditures were with diverse suppliers – enterprises owned by minorities, women, LGBT individuals, service-disabled veterans and persons with disabilities, according to the company's annual supplier diversity report submitted recently to the California Public Utilities Commission (CPUC). Nearly 600, or a third of the suppliers who did business with SDG&E in 2023, were diverse businesses. In 2023, SDG&E's spending with diverse businesses reached $450.6 million in San Diego County and $950.7 million in California. For the 19th consecutive year, SDG&E has not only met but surpassed the CPUC's supplier diversity goal.

"We are laser-focused on maximizing every dollar for our customers, while also growing economic opportunities for small and diverse businesses in our region," said SDG&E CEO Caroline Winn. "Championing people by creating opportunities through diversity, equity and inclusion is one of our core values." 

SDG&E contracts with suppliers for a wide range of goods and services, everything from vegetation management, undergrounding, civil engineering and electric construction to IT, fire prevention, project management and material procurement and transport. Since launching its supplier diversity program in the 1980s, SDG&E has helped many small businesses grow into primes. Some of the company's diverse primes are paying it forward by serving as mentors to diverse subcontractors.

Last year, for the first time, SDG&E engaged Rancho Tree Service, a Minority Business Enterprise, as a prime contractor to provide vegetation management services – an important component of the company's Wildfire Mitigation Plan. 

"We are a family-owned business, and we are proud of our local operation and the jobs we have created through our vegetation management work with SDG&E," said Jose De La Cruz, owner of Rancho Tree Service. "Our crews help keep local communities safe from wildfires by trimming and clearing trees, bushes and other plants to prevent them from coming into contact with our electric infrastructure, such as power lines."

"Large employers like SDG&E play a significant role in sustaining and growing our region's economy because of the large volume of goods and services they purchase," said Mark Cafferty, president and chief executive officer of the San Diego Regional Economic Development Corporation. "Our research has shown that if major companies make small shifts in procurement to direct more spending locally, it can help create thousands of jobs and add tens of millions of dollars to the local economy."

SDG&E continues to grow its diverse supplier pool through collaboration with community-based organizations and business associations. Learn more about how to do business with SDG&E at sdge.com/SupplierDiversity.

About SDG&E:
SDG&E is an innovative energy delivery company that provides clean, safe and reliable energy to better the lives of the people it serves in San Diego and southern Orange counties. The company is committed to creating a sustainable future by increasing energy delivered from low or zero-carbon sources; accelerating the adoption of electric vehicles; and investing in innovative technologies to ensure the reliable operation of the region's infrastructure for generations to come. SDG&E is a subsidiary of Sempra (NYSE: SRE). For more information, visit SDGEnews.com or connect with SDG&E on X (formerly Twitter) (@SDGE), Instagram (@SDGE) and Facebook.

 

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SOURCE SDG&E

How much economic impact did SDG&E's procurement program generate in 2023?

SDG&E's procurement program generated $2.59 billion in direct economic impact in 2023.

What percentage of SDG&E's total expenditures were with diverse suppliers?

43% of SDG&E's total expenditures were with diverse suppliers.

How much did SDG&E spend with diverse businesses in San Diego County in 2023?

SDG&E spent $450.6 million with diverse businesses in San Diego County in 2023.

How many diverse suppliers did business with SDG&E in 2023?

Nearly 600 diverse suppliers did business with SDG&E in 2023.

What is the name of the Minority Business Enterprise engaged by SDG&E for vegetation management services?

Rancho Tree Service, a Minority Business Enterprise, was engaged by SDG&E for vegetation management services.