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Staff: Maryland utilities averaged over 40% diverse spend in 2023; utilities outline next steps
Summary
PSC staff presented the 2023 supplier diversity report showing a statewide diverse‑spend ratio above 40% and roughly $2.1–$2.2 billion in diverse procurement; utility representatives discussed results, challenges (capital projects, geography) and strategies (supplier development, tier‑2 reporting).
Maryland Public Service Commission staff presented the 2023 supplier‑diversity report and utility representatives reviewed company results, strategies and barriers for increasing diverse procurement.
Alessandro (Alex) Lee, a PSC rate‑analysis staffer, walked through the Commissionʼs 2023 findings: the statewide diverse‑spend ratio rose from about 15% in 2009 to more than 40% in 2023. Lee reported that diverse procurement in dollar terms rose from roughly $260 million in 2009 to about $2.1–$2.2 billion in 2023 and that minority‑owned enterprises accounted for a majority of diverse dollar spend in the latest year.
State Senator Mary Washington, chair of the Senate Education, Energy and Environment Committee, emphasized the legal and policy context, noting that “in Title 20 … the commission declares that it is in the public interest of public service companies to implement diverse supplier programs,” and said standardized reporting and inclusion improvements are important to sustain the program.
Utility representatives then gave brief presentations on 2023 results and next steps. Highlights from the utility reports included:
- Verizon reported a 50.7% diverse‑supplier ratio in 2023 after reporting‑methodology updates and strengthened tier‑2 reporting for prime suppliers.
- Exelon regional utilities (BGE, Delmarva and Pepco) said they spent roughly $712 million in direct diverse spend in 2023, of which about $246 million (≈35%) was with Maryland‑based diverse businesses, and described supplier‑development programs such as Empowerment Academies.
- Washington Gas reported a 32.7% diverse spend in 2023 with roughly 56% coming from direct Tier‑1 relationships and emphasized vendor portals, outreach and awards to encourage supplier engagement.
- Maryland American Water reported a 57.4% diverse‑spend ratio within its Maryland footprint but noted the companyʼs small state footprint concentrates spend with a few large certified firms; company representatives recommended negotiating realistic annual goals tailored to each utilityʼs operating profile.
Several smaller and rural utilities (e.g., Choptank Electric Cooperative, Chesapeake Utilities, Easton Utilities) described geographic and project‑size challenges: when capital projects spike, total procurement rises and the percent share of diverse procurement can fall unless diverse suppliers are engaged in large projects. Choptank and Chesapeake highlighted regional alliances and vendor registries to broaden supplier visibility.
Panelists from a range of utilities also discussed common strategies to raise diverse spend: better integration of supplier‑diversity objectives into procurement processes; prime‑supplier playbooks requiring tier‑2 reporting; vendor portals and registries; supplier capacity building and cohort development; and more frequent peer sharing of best practices among utilities.
Commissioners asked utilities about regulatory barriers and practical steps the PSC could take. Responses emphasized continued PSC engagement, forums for sharing best practices, and support for supplier development rather than new mandates. The Commission indicated staff will circulate templates and continue to track progress through the PC 52 docket.
