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10 Closures 4 | 4 Production & Citing Losses 8 |
manufacturers from 50% to 190% |
Energy Casualty Report Press Release | Send an Impact Story
Previous Reports: August 1 ECR
Stories 2.1 through 2.11 reflect companies that already closed facilities, laid off workers, canceled some production or stopped plans to expand 2.1 Casualty: Layoffs Rate Increase: 160% & 144% Plant 1 had an increase in electric rates of 144%! In order to minimize the cost impact, the plant is shutting down during electric peak hour rates from noon to 6 PM. The plant is designed to operate 24 hours per day, 7 days per week. The full impact of this schedule is far-reaching.
Overall, production costs have increased 27%. The market will not allow for that increase to be passed on to the customer. Job cutting measures have been implemented.
Plant 2 had an increase in electric rates of 160%! These rates have caused production costs to increase 13% on the main line. Sunk costs for improvements made before the high electric rates mandate that this plant remain operating at full production, which is 24 hours per day, 7 days per week, in order to remain open. Attempts were made to increase product prices in correlation with the electric rates, but the market would not bear it. Most customers are California companies trying to cope with their own electric rate increases. Job cutting measures have been implemented.
2.2 Casualty: Layoffs & Production Loss On July 11, 2001 I attended an Energy Roundtable meeting with Mr. David Freeman. A curious statistic was mentioned by Mr. Freeman, he mentioned that 40% of companies were able to shed 20%+ of their use. He praised their conservation efforts and the quick response from California businesses to help alleviate the energy crisis. X is one of those companies, We were able to cut usage by laying off workers, shutting down machines and sending our production to Ohio. We went from 7/24 to 5/24 days of operations and cut down machine time by almost 50%. 2.3 Casualty: Closure Our City itself has had to set thermostats at 85 degrees and we've gone to a four day work week. We are very concerned about the funding of the 45% rate increase in our water department, sewer department and street lighting. We feel that we have very little control over these activities and are therefore trying to extreme measures to cut costs in other areas. A local plastic irrigation fitting manufacturer has had to start manufacturing on a schedule based of time of day usage and now operates their manufacturing from 6 PM to 12 Noon. Previously they operated round the clock. One of our local restaurants closed its doors indicating the the high cost of electricty was one of the primary reasons. 2.4 Casualty: Hiring Freeze Rate Increase: 100% Here at our mill, we manufacture commercial carpet, and have a total employee headcount of 620 associates. The recent increase in our electric rates took us from 9 cents/KWH to 18.4cents/KWH. In order to reduce this enormous financial impact on our business, we identified all the large electrical using pieces of equipment, and re-arranged our production schedule, such that these operated from 11:00pm to 8:00am. However we are a company that is sensitive to our associates feelings, and the re-arrangement of shift hours for some associates is not a popular move. This spilled over to creating problems for their families, and child sitters. Passing along electrical costs in a highly competitive industry such as ours, is quite frankly, not an option. Our business is seeing a slump in sales, as companies decide to delay purchasing carpet. Our June Edison bill was double that of June last year, in spite of reducing our total electric usage by 23% over June last year. We are presently doing an electric light de-lamping project, and expect to be able to reduce our total electric demand from an average of 2.2MW to 2.0MW. We are purchasing only energy-efficient electric motors. We are "managing" our compressed air operations. Also, our steam boiler plant is being scheduled very closely with the demands of production. We currently have a hiring freeze in place until business starts to pick up. Major capital equipment spending is also frozen, until it can be decided what our long range direction will be. We are installing two portable diesel generators that will be used in the event we experience blackouts. The picture is not a pretty one. Needless to say we do not feel that industry should have to pay off the outstanding debt that Edison has incurred. For the world's sixth largest economy to have a third world energy structure is totally unacceptable. 2.5 Casualty: Hiring Freeze The increase in electricity rates has had a major impact on the bottom line of the X plant. In addition to the projected increase of $3 million for electricity this year alone, we have been forced to lease generators to ensure that our process is not interrupted due to blackouts or curtailments. The cost of these generators is over $2 million per year. In addition, countless hours were expended in engineering for the installation of these generators and plans for reducing electricity usage throughout our facility. The total cost is well in excess of $5 million to this facility alone. As a result, we are in a hiring freeze which does not allow us to replace anyone who retires or leaves the Company at this time. This has a detrimental effect not only on X as a Company and its profits, but also on the community with less good paying jobs available to the people of California. 2.6 Casualty: Layoffs We have definitely felt the effect of rising costs in California. We are a mid-sized company. At this time last year we were running 3 shifts with overtime. We currently are only running one shift with some overtime. I believe this is in turn caused the "snowball" effect that all business are facing. We are seeing our customers scale back on their projects and looking for lower prices which in turn is putting a strain on our company. We have had to layoff employees to keep payroll down. With energy prices up, medical benefit prices rising each year and work comp rates going up each year, it is putting strenuous burdens on California based companies. I think any more added cost would put a few business that are struggling to stay in business out of business. I hope this will help. 2.7 Casualty: Citing Loss Since the start of this problem, the City of Visalia has lost 6 new companies that were interested in locating in Visalia's Industrial Park. Most recently was X who wanted to locate here to be near the cheese manufacturing plants. They make and recondition the forms for cheese makers. They determined that though the location and people were great the energy costs and uncertainty made them select a site in Utah. Another concern is the proposal that large users carry a disproportionate amount of the costs within two years of adoption. This will cause even greater pressure for existing companies to relocate or expand here in Visalia. 2.8 Casualty: Layoffs Rate Increase: 79% Our July billing from SCE was $35,149 (221,340kWH) compared to May which was $18,384 (206,550kWH). The rate in July increased 79% to $.159 per kWH from May which was $.089 per kWH. X is now absorbing approximately $170,000 per year due to our SCE increases alone. We also have other expenses that are indirectly related to electricity (i.e. compressed nitrogen gas) which are produced by electricity. We are trying to determine the impact to X and are now estimating that our costs of operating have increased approximately $40,000 per month due to increased electricity costs. This translates to $480,000 per year penalty. Our industry is experiencing an unusual downturn with many customers (primarily industrial) reporting decreases in sales of 10% to 30%. We are taking aggressive measures to remain solvent. As of August 1, we have layed off 13 employees and have implemented a 4-day work week for an additional 80 people. We would have retained most of these people had it not been for the increased electricity costs. We are not coping well with the current increases, so it is almost unnecessary to comment that additional increases will result in significant changes in our business. By the way, we have been contacted by a number of other areas of the country that promise unlimited electricity at less than $.04 per kWH. 2.9 Casualty: Citing Loss Rate Increase: 100% Our current energy bill has more than doubled an increase of more than $100,000 per month. We have installed all the energy saving devices possible but unfortunately we still have this type of increase. We have looked at alternative schedules for the plant but unfortunately thr overtime laws in California prevent this. Our division recently shutdown a folding carton plant in X and a portion of the manufacturing equipment and sales were to come to California. This would have represented 100 new jobs as well as a building expansion of 150,000 square feet. Due to the unfavorable business climate in California, (ie. energy costs, wage and hour laws) the business was put into our Ohio facility and they will service the Westcoast. 2.10 Casualty: Layoffs X terminated the employment of 20 employees, we shut down regular operations during the hours of 12:00pm and 6:00pm. The pressures we are facing every day from (LCC) low cost countries make it impossible to increase the price of our products. 2.11 Casualty: Production Loss X has seen our electricity rates more than double with the last electrical rate increase. X has rotated our production requirements out of the peak hours of the day to conserve energy and reduce costs. There are many hidden costs involved when moving almost 2,000 people from the a normal day shift to a swing and late evening work schedule. This action was the only way possible to help reduce the impact of the unfair energy rate increases. X company competes in the world wide marketplace and now find it very difficult to remain a California business. The increase in energy cost was a factor in the decision to drop vegetable processing. The elimination of processing vegetables will eliminate over 500 jobs. It is time for the legislature to recognize that there is no free ride in the energy marketplace. The political establishment has decided that California business must shoulder the majority of the costs for the rate increases. When people do not have jobs to support their families, the cost of energy is only a minor part of their concerns. Unfortunately, there are more voters that represent families than business. The outrageous increase in California energy can be traced to action or inaction taken by the legislature. Deregulation properly done could reduce energy costs in California. Free marketplace actions must be able to occur. Conservation, and a mild summer and other factors have contributed to the situation where the State of California does not expect rolling blackouts but the debt of the electrical system continues to increase. California businesses should be required to pay their fair share of the rate increases. To have business subsidize, residential rates and a reduction in California jobs is the the worst of all situations. If the present rate structures are to be used, then realistic baselines must be established for residential users with across the board increases applied. Everyone knows that the cost of energy has increased in the last year. Everyone should be required to participate in the the rate increases. Business energy costs have increased over 200% and has driven many businesses out of business in California. |  | Stories 2.12 through 2.31 reflect companies that are in danger of laying off employees, moving facilities or canceling expansion plans in California 2.12  Before 2001, our Southern California manufacturing firm had not endured a quarterly loss year since the first year of our 17-year history. We have never had a layoff. We have been a healthy, profitable company with growing employment, and we have shared these gains with our people.In 1999 and 2000, our profit sharing plan generated nearly $7,000 per year for each of our 1,000 employees, most of whom are hourly paid, averaging about $20 per hour in base wages. The Year 2001 would have generated another generous profit sharing distribution except for skyrocketing utility bills, which have consumed our anticipated net income for the year. Even with extreme cost cutting measures, reduced hiring, and a halt to planned capital projects, our company will be lucky to break even in 2001, due to utility bills that will be nearly tripled from historical averages. Our revenues for 2001 will be around $700 million, about the same as Year 2000 -- but utility costs will increase more than $40 million. No business can stand this kind of immediate increase in basic cost of production. And while natural gas costs have moderated somewhat, they are still high by historical standards -- and there appears no end in sight for these gigantic electricity rates. Our products compete in a global market. Unlike a hotel or a laundry, we cannot pass along a California "energy surcharge." While we expect to survive without layoffs, we will continue to shrink employment, put growth plans on the shelf -- and we will not be able to pay our employees those profit sharing checks which they have traditionally used for homes, college education, new cars and nice vacations. The people of California are only beginning to realize the immense ripple effect of these high utility rates on our state's future. 2.13 Rate Increase: 100% Currently, we are facing $600,000 additional energy costs for this year. If legislators add further increases to our already 100% higher rates, it will become even easier for us to justify moving our facilities to a more favorable location. Businesses don't vote each year at the election boxes, so it is easier for politicians to pass along cost increases to them. However, businesses vote by leaving the state, taking hundreds of jobs with them. In the long run, placing the burden on businesses to bail out the SCE debt will not benefit the state. I would like to see a more equitable distribution of these costs, in addition to the rates we have already been subjected to. 2.14 Rate Increase: 120% Our electric rates have increased 120% due to the rate increase and due to the fact that we had to get off the interruptible rate to insure we had a more reliable supply of electricity. When we signed up for the interruptible contract it helped make our electric costs competitive with other plants in our system and it was based on only experiencing minimal interruptions over the last 20 years. But our experience in 1999 and early this year where we were being interrupted daily caused us to get off the interruptible rate as soon as we could. The net/net is that our electric costs have increased 120% even though we have reduced our energy use by 10% and moved almost 30% of our energy to the off peak hours. This has the potential to seriously impact our business. Our competitors do not have this astronomical increase in electric costs simply because of their geographical location. Our production volumes are based on our cost to produce and ship to a specific market. With higher electric costs, our sister plants will probably be able to produce and ship at a lower cost to some of our markets. 2.15 Rate Increase: 94% I do not really know how to begin discussing and describing this deplorable and potentially devastating energy cost situation, especially as it applies to the Industrial and Manufacturing sectors of the California economy. This area of concern and frustration occupies most of my time each and every day, simply trying to figure out ways to keep my employees, employed. X is an I6 large customer or account of Southern California Edison. In 2000, we complied with every called I6 interruption and provided to the ISO, our 1.7 megawatts of load. In 2001, we have also complied with every called I6 or stage 2 interruption. On January 4, 2001, when the CPUC announced an electricity increase of $.01/KWh or 16%, we accepted this increase and put plans and capital in place to reduce our load and offset this additional cost. When, in April, we began hearing rumors of a $.03/Kwh rate increase, I became greatly concerned as this would be a tremendous and almost insurmountable negative impact to our bottom line. I attended the CPUC rate increase distribution meeting that was held in San Gabriel in early June and informed the CPUC representative present that I was not here to complain, but to ask for a fair and equitable rate increase to all user sectors, industrial, commercial and residential. What did we in industry get, not an increase of $.03/KWh, but an increase that totaled $.057/KWh or 80.25%. The electrical costs to run this paper mill have been increased in 2001 by a total of 94.75% and this has increased our cost and reduced our bottom line by over a million dollars. By comparison, the X Mill in Rockton, IL, gets their electricity for $.03/KWh. Another example of the impact of recent energy cost increases, electricity and natural gas, is the fact, for this mill and other California manufacturing companies, it is now less expensive to produce and ship paper and other goods from South Carolina, Virginia, Illinois and most any other state, into California than it is for us to manufacture. Recent decreases in natural gas have negated this condition, but we are very close to the edge and simply cannot absorb additional costs and remain a viable operation to X shareholders. For the past three months and for the foreseeable future, this mill is and will be the highest cost of manufacturing mill in the United Sates. This is solely due to our current cost of energy. I am aware of two competitive papermills in California that have ceased operations this year due to energy cost. Not a day goes by that one of the teammates employed at this mill asks me to work really hard as they and their families need this job. Our average seniority here is 18 years and all of our teammates truly enjoy their work. We have invested over $300,000 dollars this year in energy reduction projects. We have lowered our demand by 350 kWh or 20.6% and this is the only thing that is presently holding our head and the jobs of our teammates above water. Another rate increase will simply be disasterous. The Governor and Government are charged and responsible for the creation of an environment conducive and friendly to business as this is the lifeblood or enabler of the entire California economy. This state will simply not run on burger barns and shopping malls. I have talked with numerous business associates of mine that are members of the CMTA and other associations. Virtually all of them have been running Performa’s associated with relocation of their businesses out of state. I firmly believe that we, in manufacturing, are on the very edge of the economic viability precipice and I sincerely hope that the California Governor and the entire Legislature understand the total political and economic ramifications of pushing industry off of the edge. 2.16 Rate Increase: 90%  Roplast, founded in 1990, manufactures plastic bags and film within an Enterprise Zone in Oroville where the unemployment is close to 8%. We employ some 180 people. We supply national retail and food chains as well as packers in the Western States. Our main competitors are in the Mid West, Canada and the Far East.PG&E supplies our power. We operate process equipment on a 24/7 basis; so, while there is little scope for saving electricity, much of our power use is off peak. In July, when we used 2% less electricity than in July 2000, our electricity bill increased by about $50,000 (100%) to $105,000. In terms of sales dollars, the rise in electricity costs represents about 3%, in an industry in which in good years net profits rarely exceed 5%. In terms of payroll, the rise in electricity costs represents 17% of the total – that is to say it is the equivalent to giving our employees a 17% pay increase. The increase in power costs has not hit our competitors to anything like the same extent and we cannot pass the extra costs on. Unless there is some relief from the extra costs, imposed on us by policies made in Sacramento, which include electricity and health costs, or there is some change in our industrial situation in the next few months, it will not be possible for Roplast to continue to operate in future in the way it has in the past. Fewer people will be employed and there will be little or no money available for increasing wages and benefits. We have received several notices from other States suggesting that we move with the incentive of unlimited electricity for as little as 3.8c/kwh, as opposed to the 15.4c/kwh we are now paying. The saving from a move to Missouri would be over $600,000 per year. It seems strange that the State Government, which has programs to help industry in areas of high unemployment, should offset the value of this assistance many times over by singling out industry, not throughout the State but only in areas served by certain power distributors, to carry the major part of the extraordinary power costs which were the direct result of legislative action. This is neither in the interest of industry nor the voters who need decently paying jobs more than they need subsidized electricity. It is particularly galling that industry in Oroville, where a significant proportion of the State’s power originates, should be forced to pay extremely high prices for power even though delivery of the power to local industry is comparatively inexpensive. Moreover, a company like ours, which has steady load all 24 hours, used to be offered significant incentives, which now seem to be diminished even though the State has surplus power in off peak hours. 2.17 Please oppose passage in the State Assembly of SBX2 78 in the strongest way possible. This proposed business rate increases unfairly burden California business at a time they can least afford increased costs. At present, our Company has taken all possible means to hold down our electricity usage. We compete in a world market, most of which does not suffer unreasonable energy cost increases and certainly not increases to bail out incompetent legislation and energy provider greed. Certainly, we can hold the line with prices on our products for only so long. We are over 700 people here, making musical instruments and amplifiers sold and respected throughout the world. Our manufacturing competition in Asian countries does not carry any electrical cost of the nature that SBX2 78 will impose unfairly on us. 2.18 We are a small business in So. California. We just received an adjusted bill for $6000. in addition to a four fold increase in our workers comp. Its no wonder businesses are moving from California. Its only a matter of time. 2.19  My
name is Don Richey. I am the Vice President of Finance for Signal
Solutions Corporation at 4702 East Second Street, Suite #1, Benicia,
California. My phone number is 707-747-1100, ext 204.We are a small contracting company with 32 employees. Our utility bills have increased 60% since this so-called crisis arose. We have conserved power usage about as much as we can. Please send this message to our legislators: YOU MUST BE NUTS!. Why is it that these people always want businesses to pick up the tab when these legislators have blown it so badly. The last thing we need is to have the state running our utilities. They will only make it worse and then ask businesses once again to bail them out. To encourage awareness of the problem and to encourage conservation, all electric customers must participate in the solution. Giving consumers a free ride is about as dumb an idea as I have heard. No household consumer will ever conserve a meaningful amount of power if they know that someone else is paying for it. We small business owners just don't have the resources to pay this debt alone. Hopefully, members of the legislature will hear our complaint loudly and clearly. 2.20 Placing the responsibility for electricity cost squarely on the shoulders of business seems counter productive, as we are forced to both forgo raises and cut hours. What does this accomplish? It is difficult for a small business to raise fees to compensate for these increased overhead cost yet we try. If we make a mistake here, it cost us our clients, which again forces us to cut overhead. ( What a vicious circle )...Even if we don't loose clients, don't you think every other business in the state is trying to do the same thing. Where does this get us? We are a small employer who provides good jobs for 9 people. It will soon have to be eight! 2.21 I am writing to you to make you aware of a situation that threatens my ability to do business in California. The current economic downturn has left us hanging on and cutting back in all areas. Fortunately, we have not had to make any major reductions in our workforce to date. I am confident that we can weather this economic storm but my concern is on electricity costs. Our average monthly cost for electricity has been $2,900 per month. I just received a bill which has 10 days of billing at the new rate and my bill is $4,800. I have called PG&E and they estimate my bill to be $6,000 per month once I am billed for the entire 30 day cycle at the new rate. This is a great concern for me. I was told that this new rate will be in effect for an estimated 10 years as we pay off their debt. Additionally, I am concerned overall that these new rate increases will finish off companies that are on the financial edge. I do business with at least 100 other companies and at least half are struggling to stay alive. This will not help. The biggest problem with this electric rate increase is that the consumer and the economy get nothing in return for the added expense. There will be no more jobs, no more economic expansion and a much greater slowing if not stopped growth as a result. In my situation the increase in my bill is equivalent to a lease payment for a piece of machinery that could be used in my business that would easily employ 2 more persons making good wages. This would be a plus to the economy. This would expand my workforce by 5%. However, because we get nothing for the additional electricity costs, we may be forced to reduce our workforce to compensate for the increase in electric costs. This is a huge dilemma not just for my micro-economy but it’s huge when you apply this across our whole economy. Do the math and you will find devastating results. My purpose in writing is so you can hear it right from an affected source. It is becoming very, very difficult to conduct business in California. Employers such as myself are dealing with very high labor costs, soaring workers compensation costs and now huge electricity costs. I never dreamed that I would have to consider moving my business to another State but it’s on my desk for consideration. After some research, it is apparent that other states are very interested in businesses that can employ people. They are making it easy for business to flourish with a myriad of incentives. They have realized that a good business climate has real economic benefits for a population that is gainfully employed. It makes me mad to think that our costs in California are too high to compete outside of this state. 2.22 We are a division of Gibraltar Steel in Buffalo, NY. Our energy costs are causing our owners to consider moving this company out of state when our lease renews. This was never discussed before the high cost of energy. Passing on the deficits to business will further encourage the decision to move out of state. 2.23 I would like to bring to your attention a critical situation that threatens our business, an aluminum smelter company located in southern California, and the jobs of the approximately 150 people our business employs. X has been in business for over 32 years. It produces aluminum alloys destined for customers located throughout the United States, but also located throughout the world who manufacture parts that have, among others things, important aerospace and automotive applications. Ours is very energy intensive process. Electricity is a critical element of the process used to melt the aluminum and other raw materials necessary to manufacture our aluminum alloys. Developments in the energy industry during the past number of months threaten our ability to stay in business. Soaring energy costs put us at a competitive disadvantage both in our domestic and global markets. We compete with domestic companies outside of California as well as companies around the world. We are unable to remain competitive and pass along these increased energy costs. Typically budgeted monies earmarked for expansion and growth are now used to offset energy costs and to pay for programs that minimize our exposure to blackouts. Like many other businesses in Southern California we have, at great expense to our process, reallocated our labor to more effectively utilize the TOU tariffs. We believe that this matter requires the continued attention of yourself as well as all other concerned governmental representatives because it threatens the viability of many businesses and thus the California economy. 2.24 We have been very hurt by the large increases, I have seen in the past few months for our electrical power. It has really cut into our business as we have lost contracts to vendors from out of California, and in one instance from out of the country ( vendor was located in Canada). 2.25 Our governor and state legislature are trying to put the fix on business and employees. The rising cost of energy due to their self interests and lack of forethought will end up costing thousands of jobs in this state. We employee approximately 55 here in Sacramento and the impact will be reduced wage increases and benefits to these employees as less funds will be available for these types of expenditures. 2.26 We have been majority impacted by the power increase, our electricity bill increased over $2000 dollars in one month, we don't turn on our air conditioner because we just can't afford it. We have not received our next bill, but are anticipating it's impact. It would be devastating to our business to pay more than we already are. We have not had to lay off, but we are not able to give decent pay raises either. It is just too tight. This increase is so high and taxing we are not able to improve our facilities, or buy new equipment. It seems that the legislators in this state do not have compassion for the business person. The legislature has got to realize that the businesses cannot continue to carry this power crisis, without drastic results. If they continue to increase our power bills, it will surely put us out of business. As a retail grocery outlet we are needed in this community and our employees need to be able to make an affordable living. If we have to continue to carry the full load in this state, we will not only lose this business, but we will not be here to do a service to the community and provide employment for the people in this county. We have done all we can to conserve, now it is the state's turn to help us. 2.27 As a small business in the Mojave Desert ( where the average temperature for the summer months is 105 with days reaching the 120 mark) for the last twenty five years it has been a constant struggle for our company to keep our doors open. Although I do not have a specific "story" to tell you about the increase in our electric bills and their effect on our daily operations, I can tell you that we are aware of many businesses that have left the state of California. It seems the Great State of California is determined to run business off. We have continued to have large increases in our workers compensation insurance,liability insurance and utilities as well as increases from our suppliers as they try to recoop on their cost of operations. Of course we pass some of these increases along to our customers. Just as if bill #SB78XX passes we will be forced to pass along the cost to our customers. Eventually Businesses and consumers alike will seek opportunity elsewhere , where the State Legislature does not pass on the mistakes it has made or the mistakes of other businesses on to their constituents. 2.28 I am the President and Owner of X. I provide peer advisory board services to company presidents and business owners. The thirty companies I work with represent over 5,000 jobs in Southern California alone. In recent meetings some of those owners have talked about relocating their companies to Texas, Nevada, or Arizona. They cite the high costs of electricity and power as well as the lack of reliability for that service. While this summer's predicted rolling blackouts have not been realized, the specter alone of these shut downs was enough to impact productivity. Another business, one of the nation's largest nurseries, may close its doors. The increase in natural gas prices drove annual energy costs from $215,000 to $850,000+. This family business with a rich 30 years history may be forced to close, affecting over 100 employees. It is inconceivable that the legislature is considering placing ther burden for "bailing out" the utility companies squarely on the shoulders of businesses. Without these businesses there will be no jobs. Without the jobs tax revenues to the state will vanish. 2.29 Rate Increase: 40% X is a significant electrical energy user (60,000 to 100,000 kWh per month) and has experienced greater than 40% increase in electrical rates. This has been a direct reduction in profitability. We are unable to increase prices due to competitive pressure from producers outside the state of California. This has caused a reduction in business and consequently a reduction in work hours for our employees. Further increases in electrical rates will necessitate reductions in the workforce just to keep the business viable. Further electrical rate increases coupled with the current business downturn could be a terminal issue for our company. 2.30 With the continuing rise in energy cost, I have had to increase my product and services prices 40%. My client base has dropped due to the increase. At the current rate of drop, I can see the end of my business in the future. 2.31 Given that I've attended seminars on how to cut energy usage and have implemented 90% of the ideas I've heard, it's astounding to me how high my energy costs have become at my small business, but how much my energy costs have gone down at home. I can only conclude that the legislature in this state is trying to pass along the costs to businesses large and small while at the same time keeping their constituency as happy voters. As a small business owner, it's my job to put in place plans that generate sales and control costs. It's bizarre to me that I have no say anymore in energy as a P&L expense, and it seems to be getting rapidly out of control. I'm sure that my 2 competitors in Wisconsin and the one in California (a subsidiary of a Massachusetts conglomerate) do not have these problems. It truly puts my company at an economic disadvantage. Can you imagine our company passing along an "energy surcharge" or some other "pass-along" as hotels are apparently trying? Hotel guests leave after a nice vacation; if my many out-of-state customers leave because we're disadvantage by peculiar cost structures of doing business in California, we're out of business. Established in 1985, we're a 16-year-old business. Unless you can figure out a way to retire the utility's debt without passing it on to California businesses, I very much fear for the businesses and the economy of this state. |