California is a petri dish for left-wing social experiments, and its latest experiment, it seems, is tying woke virtue signaling and social value to hiring certain businesses while excluding others.

This was all revealed in an exposé in City Journal by senior fellow Christopher F. Rufo and senior investigative reporter Austen Hufford.

Businesses in the Golden-tarnished State, specifically the ones that contract their services out, now have the opportunity to register as LGBT companies and receive special treatment. This latest bout of discrimination is along the lines of giving preferential treatment to women and minority-owned businesses as a form of “reparations for oppression.”

To be clear, this LGBT certification isn’t a universally meaningful designation, as it’s not particularly relevant to everyday Californians or their day-to-day expenditures. It’s really only meaningful to the California Public Utilities Commission (CPUC), which regulates private utility companies. Due largely to pressures from LGBT activists, the CPUC has expanded its preferential treatment by giving contracts to LGBT-certified businesses.

“By 2022, CPUC had fully implemented the expansion,” according to Rufo and Hufford. “In practice, this meant establishing a ‘goal’ for utility companies with annual revenues exceeding $25 million to buy things from state-certified LGBT businesses: 0.5 percent of procurement in 2022; 1 percent in 2023; and 1.5 percent in 2024 and beyond. If ‘large’ CPUC-regulated utilities met these ‘goals’ in 2024, they would have sent roughly $633 million to LGBT-owned firms.”

So, how does one go about getting this certification? Well, business owners can be certified in several ways. An LGBT organization can write a letter confirming the business owner’s sexual proclivities, a newspaper can write about that business being owned by a member of the Rainbow Mafia, or “three letters from ‘personal contacts’ written ‘on company letterhead’ attesting to their homosexual orientation” can be used as proof of gayness, explain Rufo and Hufford. Then there are pages of paperwork to be filled out in order to confirm the LGBT certification.

If business owners misrepresent their sexual identities, they could go to jail for up to one year, so this certification is a very serious matter.

California is pressuring public utilities to award $633M in contracts to “LGBT-owned” firms. The state’s official gay-certification program has issued this checklist of documents to prove your status.

And a warning: you’ll go to jail if you misrepresent your sexual identity. pic.twitter.com/sPI2rq41cb

— Christopher F. Rufo ⚔️ (@christopherrufo) June 16, 2026

Hot Air’s David Strom pointed out that gays being included as a privileged group is baffling. Homosexual men earn the highest income of any group and shouldn’t qualify for the handout.

More importantly, this designation and the associated preferential treatment are against California law. As Rufo and Hufford write:

In California, preferential public contracting is technically illegal. In 1996, voters approved Proposition 209, which banned the state from granting preferential treatment based on race, sex, or ethnicity in public employment, education, and contracting. More than two decades later, in 2020, they rejected an effort to repeal the ban.

CPUC’s arm-twisting regulations violate the spirit of the law. The commission lists several specific “goals” for utilities’ contracting rates: 15 percent to minority-owned firms; 5 percent to women-owned firms; 1.5 percent to disabled-veteran-owned firms; and, most recently, 1.5 percent to LGBT-owned firms. It claims that these goals are not a “requirement” or “quota.” In practice, however, the agency cajoles utilities into compliance by requiring them to collect extensive demographic data, submit detailed annual reports, list their plans for increasing procurement from favored groups, and explain “any circumstances that may have resulted in not meeting” their procurement “goals.”

California is corrupt — that much is becoming clearer with each passing day — and what the leftists who run the state don’t seem to understand is that whom someone has sex with is immaterial to whether or not they run a quality business. Most people don’t care if the person installing their water meter is gay; they care about whether the installation is good quality and that their water bill isn’t messed up because of a poor job.

Product quality over sexual identity should be the priority. If getting social validation is more important than running utilities smoothly, Californians may have bigger things to worry about when turning on their stove or AC.