Power crisis proves costly for more than just utilities

By Charles Levin Ventura County Star writer Monday January 15, 2001

Higher utility bills are heading for Ventura County energy customers. But that's not the only place they're apt to feel the state's power crisis.

Groceries, water and sewer bills, and even productions of "Fiddler on the Roof" at the Thousand Oaks Civic Arts Plaza could all cost a little more after retail businesses and public agencies pass along rate hikes to customers.

Pacific Gas and Electric and Southern California Edison claim they're losing money because they must buy electricity in the wholesale market, where prices have increased fourfold over the past year.

To relieve some of their financial burden, the state Public Utilities Commission approved a 90-day rate hike of 1 cent per kilowatt hour, or 7 percent to 15 percent for businesses.

But for grocers and restaurateurs -- whose refrigeration and gas-fueled stoves practically eat power to meet food safety standards -- such price increases shave scant points from already thin profit margins of less than 7 percent.

"Anybody who thinks the cost is only in their personal power bill is crazy," said Richard Lan, president and chief executive officer of Maple Leaf Bakery, whose Canadian-based operation owns a plant in Oxnard. "Is the cost of power going to show up in the price of bread? Absolutely."

Electricity and natural gas keep the micro-brewed suds flowing at the Anacapa Brewing Co. in Ventura. Walk-in coolers, brewing vats and ovens cost owner Paul Miller up to $2,500 a month in the winter. In the summertime, air conditioning jumps the tab to $3,000, Miller said.

With the impending rate hike, "I'm going to have to tweak the menu," Miller said. "These aren't small amounts."

Ditto for supermarkets, whose freezer and deli cases suck power around the clock.

"Retailers will do everything they can to absorb that cost but eventually, they'll have to pass it along," said Dave Heylen, spokesman with the California Grocers Association.

Power meters also will zoom upward at city halls.

In Ventura, two-thirds of $2.6 million budgeted for electricity this fiscal year pays for water and sewer treatment, said Ron Calkins, Ventura's director of public works. Edison's 15 percent rate bump over three months will cost the city $400,000.

"It's a huge amount of money," Calkins said. "That means we'll have to raise rates sooner than we hoped." The city will not raise its bills until it analyzes the effect of rate increases, Calkins said.

In Thousand Oaks, assessment districts pay for street lights. But under state law, the effected ratepayers get to vote on any rate increases. "If they don't approve the increases, we'd have to look at turning off street lights," said Scott Mitnick, Thousand Oaks' deputy city manager.

Meanwhile, that city's Civic Arts Plaza houses two theaters, laden with lights and sound systems that cost $340,000 annually in electric bills, Mitnick said. Higher power rates could mean higher ticket prices to shows, Mitnick said.

The temporary Edison increase will cost Ventura County an extra $200,000 to power most of its offices, said John Johnston, director of the county's General Services Agency.

Supervisor Frank Schillo hopes the county can pay the difference using money recovered from a one-quarter percent decrease in state sales tax. If not, the county would likely respond by raising fees, Schillo said.

The county is spending $3 million for a generator system for backup during voluntary power outages. Under an Edison program, the county ratchets down its power with 30 minutes notice. Participating in the program saves the county money on power bills but leaves the Victoria Avenue Government Center with minimal lighting and no air conditioning or heat.

School districts also will feel the pinch, but it's unclear whether increased power bills will take money away from classrooms.

"We'll have to adjust our budgets and then hope the governor comes up with the money for these unbudgeted expenditures," said Gary Mortimer, assistant superintendent for business services at the 21,000 student Conejo Valley Unified School District.

Oxnard School District has already spent $817,000 of the $1.25 million it budgeted for electricity this year, said John Fitzgerald, finance director. "We're way over budget," Fitzgerald said, adding the district saved money on its bills last year. "But this year, we're going to get hammered."

Fitzgerald hopes that savings elsewhere in the 14,000-student district will pay for increased power costs. He doesn't believe the higher rates will hurt classroom supplies. But it could affect the district's ability to buy new buses or raise teacher salaries next year, he said.

At Los Robles Regional Medical Center in Thousand Oaks, officials still aren't sure just how much the new rates will cost, said Kris Carraway-Bowman, spokeswoman. But with round the clock electrical needs, "no matter what the rate increase will be, we'll be hit hard," Carraway-Bowman said.

The hospital will probably pass the cost on to insurers when it renegotiates contracts, she said. Insurers could then pass the cost along to customers through higher premiums, Carraway-Bowman said.

At St. John's Regional Medical Center and Pleasant Valley Hospital, officials stepped up efforts to conserve power the day after Gov. Gray Davis' state of the state address. Davis urged Californians to conserve at least 7 percent of their power consumption.

In a memo, hospital administrators urged employees to turn off computer monitors and lights when not in use, reduce lighting where appropriate, shut down appliances at the end of the day and reset others to energy-saving modes.

But officials at other schools and public agencies groused over Davis' call for more conservation. Many of these entities already practice energy conservation, some for up to 20 years. This includes energy efficient lights and motors and installing motion-sensitive systems in rooms that activate lights, heat or air conditioning.

With the upgrades, the city of Ventura saves up to $1 million a year in energy bills, Calkins said.

For those who've actively pursued conservation, there's little room to cut, said Thousand Oaks' Mitnick.

"Local governments don't have a lot of money," Mitnick said. "We have to be lean by nature. The only way we can cut is to shut down operations."

-- Wire services contributed to this story.

-- Charles Levin's e-mail is clevin@insidevc.com.

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-- Martin Thompson (mthom1927@aol.com), January 15, 2001