The City Journal has an interesting article exploring California’s mandated preference for gay businesses in the energy industry. If the state hits its target, “LGBT-owned businesses” will receive $633 million in contracts. Putting aside the imposition of such agendas on companies at a time of rising energy costs, the certification process for being an LGBT business is astonishing.

This is only one of various categories of preferential treatment under state law. It began in 1986, under Governor George Deukmejian, requiring certain CPUC-regulated utilities to submit annual “plans” for buying goods and services from woman- and minority-owned companies.

The specific LGBT preference began under former Gov. Jerry Brown in 2014, but was expanded by Gov. Gavin Newsom in 2019 to encourage energy companies to favor LGBT businesses.

The law is based on the protected class status under state law rather than proof that LGBT business people are discriminated against in the energy field or that LGBT owners make substantially less than straight owners.

The National LGBTQ+ & Allied Chamber of Commerce informs companies striving to come out of the corporate closet that “certification is a journey, not a destination.”

So here is how you prove that your company is LGBT.

Applicants can secure certification by providing a letter from an “LGBT organization” attesting to their sexual preferences; proof that a newspaper identified them as “LGBT”; or three letters from “personal contacts” written “on company letterhead” attesting to their homosexual orientation. Corporate officials who “falsely represent” their business as gay face up to a year in county jail.

Supplier Clearinghouse also accepts gay-certification letters from the National LGBTQ+ & Allied Chamber of Commerce. The chamber has its own list of accepted documents, including human resources complaints or police records claiming LGBT discrimination.

For Californians who gripe about having the highest fuel costs, they do not have to look far. California has created layers of taxes and regulations that drive costs for the industry. At the same time, Newsom and others continue to hamper efforts to pursue energy resources within the state.

These types of laws empower a network of activists and groups who tap into an effort worth hundreds of millions of dollars in offering “certification letters.” The website declares that “NGLCC’s exclusive LGBT Business Enterprise (LGBTBE) certification works hard for you, giving you a competitive advantage to succeed.”

What is fascinating about this effort is that it, first and foremost, benefits the owners rather than consumers and employees. Given the percentage of LGBT citizens overall, it is likely that any sizable company will have a majority of non-LGBT employees.

One can certainly argue that an LGBT owner is more likely to have a tolerant company, but there are already robust laws protecting LGBT individuals, particularly in California. This is about a preference going to companies based on the sexual orientation of their owners as opposed to the company as a whole.

The benefit to the consumer is far less obvious in encouraging companies to favor one company over another based on the sexual orientation of owners or management. Rather than encouraging price competition on contracts, Democrats have inserted an additional criterion that impacts as much as $633 million in energy contracts.