Energy Crisis: Is Your City Next?

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Energy Crisis: Is Your City Next?

Power shortages may hit other parts of the country.

by Maccabee Montandon

John Hall isn't taking any chances. Though his Chicago brewery, Goose Island, is far from California's ongoing energy crisis, he's taking measures to protect his company from possible brownouts this summer. Hall is planning to install six 30-kilowatt microturbines to ensure his ales and stouts remain properly chilled.

Sound like overkill? Maybe not. The energy problems that have afflicted California and its businesses may soon metastasize across the U.S. The causes—failed deregulation, aging and inefficient power lines, and a decade of ever-increasing demand—are not problems exclusive to California. Concerned governors from nine Western states met in February to head off a regional economic crisis sparked by the spread of shortages beyond California's borders. And energy experts say parts of Illinois, New York City, and Massachusetts are in danger of being left in the dark, particularly if this summer ends up a scorcher requiring a steady stream of air conditioning.

"If everyone cranks it up, we could see some serious reliability and cost issues," says John Makens, an economist with the Energy Information Administration.

So what can you do to stay up and running without blowing your budget? Installing your own microturbines isn't cheap. A system like Hall's can cost as much as $200,000. If you don't have that kind of cash, see if your state has something similar to Illinois' Small Business Energy Program, which offers government-funded energy audits to help companies conserve power. Another alternative: Consider shifting your production or employee schedules to off-peak hours when your local energy grid isn't maxed out.

Even if your municipality keeps up with demand, it's still a good idea to plan for higher bills. According to the Bureau of Labor Statistics, energy prices rose 3.9% in January, and natural gas costs jumped a staggering 17.4%, the bureau's highest recorded monthly increase ever. Few small businesses have the power to negotiate lower rates, so consider joining forces with groups such as the Massachusetts High Technology Council, a lobbying firm that in 1998 negotiated a fixed-price deal with PG&E Energy Services—now Enron—on behalf of 40 Massachusetts businesses. The Council estimates it will save members 25% to 38% on energy costs this year as market prices continue to increase.

http://www.fsb.com/fortunesb/articles/0,2227,1586,00.html

-- Martin Thompson (mthom1927@aol.com), April 20, 2001


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