Friday, May 18, 2001

Power cost puts heat on businesses By Jason Gibbs Reporter-News Staff Writer

The rising cost of electricity has local business owners feeling they’ve taken a hit below the air-conditioner belt.

Utility bills are already taking a chunk out of businesses’ bottom line and Abilene has yet to endure the dog days of summer. Even though the average high temperature this month is about 10 degrees lower than last May, energy costs are up.

Many small businesses can’t afford increased energy efficiency measures and are limited in their ability to trim costs.

Manuel Castro, owner of Los Arcos restaurant on Ambler Avenue, has seen his utility bills increase substantially over what he paid last spring.

Conserving energy in the restaurant business is difficult because the ovens and grills are constantly running. The coolers must run to keep employees and patrons cool, he said. Little can be done to insulate the building better to keep the cool air in.

“The doors are open and closed, open and closed,” he said. “There is no way to save.”

The Mall of Abilene has seen utility costs rise between 5 percent and 15 percent over this time last year, said Steve Majors, the mall’s general manager. Little can be done about it except for making sure air conditioners run as efficiently as possible.

The National Weather Service in San Angelo reports the average high for May 2000 in Abilene was 92.4 degrees. The average high temperature this month has been about 81.5 degrees. Temperatures throughout the Big Country are expected to be normal or slightly above normal through August, according to the weather service.

But that’s not entirely the problem.

“The temperature is not the main factor,” Majors said. “It’s mainly the increased rate of electricity that’s causing our energy bills to be higher.”

Demand for electricity, especially in the Midwest and in California, has outstripped power providers’ generation capacity, due in part to fuel shortages. Without sufficient fuel to run power production facilities, the cost of available electricity has skyrocketed.

What to do?

The Mall of Abilene has started a preventative maintenance program to ensure its air conditioners are working as efficiently as possible. Expenses such as lights are fixed by the mall’s hours of operation and can’t be pared.

If the temperature rises, mall officials have no choice but to run the coolers.

“We had considered phasing out some of the air conditioners, but we just can’t do that,” Majors said. “It would get too hot for the customers’ comfort.’’

Hendrick Health System, which buys electricity at an institutional rate lower than the average commercial rate, saw an 89 percent increase over last year for the month of April. Last month’s bill totaled $129,000, said Rick DeFoore, executive vice president of Hendrick Health System.

“It’s really terrible,” he said. “We have some energy conservation measures in place, but at the main hospital, we have to let the patients control the thermostats in the rooms.”

Among the conservation measures Hendrick has implemented are computer-controlled lighting and cooling systems in office areas to automatically decrease usage after work hours.

“Still, with all those measures,” he said, “we are spending a lot of money.”

In anticipating the summer months, hospital officials express concern.

“The higher the demand, the higher the rates are going to be,” DeFoore said.

Greg Blair, general manager of community services for AEP-West Texas Utilities, said some businesses have signed a commercial contract for an “interruptible rate.” Those businesses get a slightly lower rate, but if AEP-WTU experiences power shortages, their electrical service could be temporarily interrupted.

Locally, several larger electricity consumers are acting on their own to reduce usage during peak consumption — 1 p.m. to 7 p.m. from June through September.

“If they can decrease the amount they consume during those hours, they get a substantial discount,” Blair said.

Billy King, owner of Mail Processing Service, a mailing and package delivery service, said the increase in prices at the gas pump is also eating into his profits. King said the expense is not one he can pass on to his customers.

“In my business, a courier delivery service, it’s killing me,” he said. “If I keep going up on my delivery prices, people will go somewhere else.’’

His electricity prices have remained fairly constant, King said, a fact he attributes to his ongoing attempts to conserve as much as possible. Unnecessary lights are turned off and the air conditioner is used only in extreme heat.

Bitsy Gregory, owner of Bitsy’s Flowers, finds herself in a similar situation — trying to conserve as much as possible in the face of increasing electricity bills. She, too, must accept that a significant part of her electricity demand is fixed by the nature of her business.

“With four refrigerators, you can expect it (electricity bills) to go up,” she said.

Gregory is careful to close all her refrigerator doors. She turns off lights in unused portions of her business. Still, she is bracing for large energy bills as the summer heat intensifies.

“The economy is all right,” she said. “But the fuel prices are ridiculous. We try to be very economical. We just hope it’ll rain a lot. That always helps.”

Contact working writer Jason Gibbs at 676-6734 or gibbsj@abinews.com

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-- Martin Thompson (mthom1927@aol.com), May 18, 2001