Published Tuesday, February 13, 2001

Ripple effect of power crisis hits customers

By Janet Adamy

TIMES STAFF WRITER

PG&E isn't the only company getting a bigger share of consumers' paychecks because of higher energy prices.

Dutch Girl Dry Cleaners of Lafayette and Walnut Creek is asking for an extra dime. Abernathy's restaurant in Walnut Creek wants an extra quarter. And the Oakland Ice Center would like an extra dollar.

With higher energy prices threatening to eat into their profits, some East Bay businesses have started passing the cost on to their customers. Many others are preparing to hike prices on everything from haircuts to health club dues if their PG&E bills keep going up.

"I'm just shuddering @ what next month is going to bring," said Nick Gryfakis, owner of Abernathy's, a family-style restaurant.

Some businesses say they upped their prices solely to cover higher energy costs. Others say sky-high PG&E bills served as a catalyst to implement price hikes that would have come eventually.

The price increases are coming mostly from small businesses, which get hit more directly by California's higher energy costs than national chains. Most blame their price increases on the higher cost of natural gas -- not electricity. While the utility is allowed to pass rising natural gas costs onto consumers, rate freezes prevent it from doing the same with electricity, PG&E spokesman Ron Low said.

Bracing for a higher-than-usual gas bill, Gryfakis tacked an extra 25 cents onto alcoholic drinks at his restaurant in the middle of January. But when he saw that his January gas bill was $1,790 -- almost triple what it was -- he realized the quarter increase wouldn't be enough.

He's hesitant to raise food prices because keeping entrees under $9.95 is part of his advertising pitch. But he's not sure how he's going to cover the January gas bill, which he's paying in chunks, without losing customers. They're not happy about the small drink price increase, he said.

Dutch Girl Dry Cleaners upped its price Friday for dry cleaning a shirt from 89 cents to 99 cents for regular service and $1.75 to $1.85 for same-day service to offset a January PG&E bill that, at nearly $2,000, was almost twice as high as usual. Dutch Girl's Steve Depper said that if his bills go up any more, customers at his Walnut Creek and Lafayette locations may start paying more to get their suits, pants and blouses dry cleaned.

Higher gas bills have forced Ducky Wash & Dry to raise the price of its dryers at one of its Dublin locations. A quarter gets you 6.5 minutes of drying time -- two minutes less than it did two weeks ago.

"We're hoping that will cover the difference," said co-owner Jean Mello. But if it doesn't, washer prices could go up, too.

For some businesses, energy price hikes were more an impetus for upping prices to match the going rates rather than a move to exclusively offset energy costs.

"We hadn't raised our prices in a while, but this gave us reason to help justify it," said Dave Fies, manager of Oakland Ice Center. The rink will raise skating prices by $1, bringing the cost for adults to $7 and $6 for children starting Feb. 20. But that won't cover the costs of a gas bill that doubled in January and an electric bill that went up 20 percent.

"To get what we really would need it would probably be too much, so we're just trying to share the expenses," Fies said.

The Plum Tree Inn of downtown Pleasanton was due for a rate increase, and a higher gas bill put the fire under owners Bob and Joan Cordtz to bump up their rates by $10 at the beginning of the year. The cost of a night at the bed and breakfast is now $145. Cooking guests' oatmeal on the gas stove, washing and drying their sheets with a gas-powered washer and dryer and heating the water with gas sent the December PG&E bill up 30 percent, Bob Cordtz said.

Many other East Bay businesses say they're thinking seriously about raising prices, but are waiting to see their next energy bill.

Art Healey, manager of Artistry for Hair & More, said higher energy costs will likely force him to charge his stylists more for renting space at his Walnut Creek salon -- a cost he suspects the stylists will pass on to their customers. Short of filing nails, there isn't a task at his salon that doesn't use energy.

But Healey fears that could turn away customers as he just raised prices -- which average between $45 and $60 for a cut and style -- in November.

"I can't raise my prices that frequently to keep up with those increases," Healey said.

Debbie Flansburg, owner of Lafayette Health Club, has no plans to raise prices just yet, but said: "If it really impacts me and looks like it's going to be a permanent thing, then I have to definitely raise my rates."

Small businesses with big national competition, such as King's Digital Copies and Printing in Pleasant Hill, don't take the threat of price hikes lightly. President Shahrokh Shakeri said he has no hope of staying competitive with Kinkos if he raises prices.

"If energy is high for them here, they have in all the other states," he said. "They can afford (it), but I cannot."

Though some customers have inquired about the increases, most of the price-hiking businesses said patrons haven't gotten too upset.

"They have to know by their own PG&E bill what ours must be," Ducky Wash & Dry's Mello said.

Walnut Creek resident Kris Chang doesn't think it's fair, but knows she doesn't have a choice.

"Our income definitely did not go up because of the energy crisis," Chang, 30, said after dropping off her dry cleaning at Dutch Girl on Monday. "I don't think we have much say in it. We just have to pay for it."

Janet Adamy covers the retail industry. Reach her at 925-943-8263 or jadamy@cctimes.com.

http://www.contracostatimes.com/news/leads/stories_one/pricehike_20010213.htm

-- Martin Thompson (mthom1927@aol.com), February 13, 2001

Answers

Here at my coffee shop in the east Bay we are going up on bacon and eggs from 5.99 to 6.99 tomorrow. I pray that this does not drive our loyal customers away, but our gas bill has more than doubled and pork prices are way up. That's the big scoop for today.

-- Ken (n4wind@aol.com), February 13, 2001.

Here in WASHINGTON STATE we just raised our rates from $57 to $60 per hour to repair electric motors and from $38 to $40 bucks an hour to repair power tools, and who knows if that will be enough?

-- Ann (zyax55b@prodigy.net), February 13, 2001.