Because the utility business is inherently capital-intensive, our purchases of products, material and services are significant—costing approximately $1.3 billion in 2013. These purchases have a tremendous positive impact on business and the economy.
At PHI, supplier diversity is a key strategic initiative. We understand that when we help companies grow, they hire people, and those people buy products and services that help fuel the economy. Our commitment to a diverse supplier base is demonstrated by our longstanding practice of helping diverse suppliers access contracting opportunities with PHI companies as well as PHI's prime contractors. We believe proactive inclusion of diverse suppliers who offer the quality, value and services we need strengthens the availability of competitive goods and services to PHI. Just as we reinvest in our company to grow, we also invest in our community to ensure growth and quality of life.
In 2013, PHI paid $178.2 million to diverse businesses for their services. The graph below depicts the breakdown of these expenditures by PHI region. This represents about 14 percent of total procurement expenditures.
In addition, PHI subsidiary Pepco Energy Services signed $66 million in energy efficiency contracts in 2013, compared to $9 million the previous year. Construction affiliate W.A. Chester signed $111 million in underground transmission construction contracts in 2013, compared to $47 million in 2012.