Utility bills push local consumer prices up

March 14, 2001

By TOBIAS YOUNG THE PRESS DEMOCRAT

At home, the PG&E bill has skyrocketed. At work, the lights are dim and the heater is turned down.

Now leaving the house for errands or dinner is going to cost more, too.

It's almost unnoticeable at first -- a dime extra for a burger, a quarter extra for a load of laundry.

But pretty soon the message becomes unmistakable: Prices are rising for everything from a fast-food lunch to a hotel room, and utility costs are being blamed as the culprit. Inflation is making its way into the daily lives of North Coast residents.

Elyssa Reyes of Petaluma used to have enough money from a roll of quarters to wash her laundry and then clean her vehicle at the car wash. Not anymore.

And because her employer, a local grocer and deli, is sweating over higher energy costs to keep the freezers and cookers running, she doesn't think it's the right time to ask for a raise.

"I used to go to a tanning salon. But I stopped because they jacked their prices up, too," Reyes said. "It's a vicious circle and PG&E is written all over it."

Electricity costs have gotten most of the headlines because of rolling blackouts. But natural gas prices have risen higher and faster. Fortunately, they may ease faster, too.

Business isn't taking a wait-and-see approach as profits are eaten away.

Hotels are levying a utility surcharge. Restaurants are raising prices. Health clubs are increasing monthly dues. Laundromats are charging an extra quarter for a washing machine and lowering drying times. Bakers are feeling the squeeze.

In Sonoma County and throughout California, hotels are charging a $1.50 to $4 surcharge per night to offset utility costs.

The Doubletree Hotel last week added a $3 nightly charge. General Manager Bill Comstock said most customers roll their eyes at the inevitability of the extra charge, but he's had very few complaints when people understand it is connected to the ongoing energy crisis.

"If someone refuses, we wouldn't force the issue," Comstock said. "It's been very much the exception."

Comstock said utility bills at his 245-room Rohnert Park hotel have climbed from $5,000 a month last year to $20,000 this year. And vendors are charging the hotel more to offset their own utility bills.

All 150 Marriott Courtyard Hotels in the state have tagged on a $1.50 per night utility surcharge, Santa Rosa Marriott General Manager Brad Calkins said.

Starlett Bruner, owner of the Happy Hamper Laundry in Petaluma, said her monthly bills have almost tripled because of increases in water and sewer bills, electricity and natural gas. After holding prices steady for four years, she has raised her prices twice in two months.

"It's a terrible situation. It turns out I'm working for PG&E and Petaluma utilities," she said. "This is just a bad year so far."

Happy Hamper customer Christine Pitt said she wasn't surprised by the increase after the monthly utility bill for her one-bedroom apartment went from $30 to $127. But Pitt, a Kaiser pharmacy technician, said it wouldn't hit her as hard as people barely scraping by.

"I'm not bitter. I think the whole thing's kind of scary," she said. "For the people who are barely making it, on a tight budget, it will be tough."

Even health clubs are tacking on extra fees.

Rob Domont, owner of Petaluma Valley Athletic Club, said the heated outdoor pool is the club's biggest energy expense. The pool hours had to be cut back from 16 hours to eight and the monthly dues bumped up $10 in December.

Burger King in Petaluma tried a 10 cents per order surcharge. But that didn't last long.

"That wasn't a very good idea. There were just too many complaints," franchise owner Joe Rubin said.

Now he says the cost of his $1 Whopper will have to increase to help offset a quadrupling of the bill for the natural gas that is used for broiling burgers and cooking French fries. Also, his bread supplier is raising his prices to pay for the cost of heating his ovens.

"All of our suppliers are asking for increases. It's something that works its way up the ladder," Rubin said. "I think it's going to have a ripple effect throughout our economy."

Unfortunately for consumers, Rubin may be on target.

Steven Cochrane, a senior economist for Economy.com in West Chester, Penn., said he expects inflation to creep higher, to about 5 percent in the Bay Area this year, largely as a result of utility prices.

"It poses some significant risks to the California economy and the North Bay economy in the near term and long term," Cochrane said. "It's something we can't take lightly at all."

How long before high utility costs are reflected in every aspect of consumer life? Not very long at all, Cochrane said. "You will feel it pretty quickly," he said.

Cochrane, who is studying how the increases are slowing business growth and productivity, said there is no escaping higher utility costs in the Golden State. Electricity prices are likely to rise further, he said, while high gas prices may ease some.

Cochrane said California would eventually get relief when electricity prices stabilize nationwide as energy producers abandon their local markets to make more money selling to California and the West Coast states.

Cochrane said natural gas prices also will ease as the heat-dependent Northeast gets new pipelines from Canada that are expected to be completed in a year or two. Then gas suppliers will be able to ship natural gas to California, driving prices lower.

If prices fall substantially, Burger King owner Rubin said he expects businesses will be slow to lower prices again. "Historically, they go up. Very seldom do they go down."

You can reach Staff Writer Tobias Young at 762-7297 or e-mail tyoung@pressdemocrat.com.

March 14, 2001

By TOBIAS YOUNG THE PRESS DEMOCRAT

At home, the PG&E bill has skyrocketed. At work, the lights are dim and the heater is turned down.

Now leaving the house for errands or dinner is going to cost more, too.

It's almost unnoticeable at first -- a dime extra for a burger, a quarter extra for a load of laundry.

But pretty soon the message becomes unmistakable: Prices are rising for everything from a fast-food lunch to a hotel room, and utility costs are being blamed as the culprit. Inflation is making its way into the daily lives of North Coast residents.

Elyssa Reyes of Petaluma used to have enough money from a roll of quarters to wash her laundry and then clean her vehicle at the car wash. Not anymore.

And because her employer, a local grocer and deli, is sweating over higher energy costs to keep the freezers and cookers running, she doesn't think it's the right time to ask for a raise.

"I used to go to a tanning salon. But I stopped because they jacked their prices up, too," Reyes said. "It's a vicious circle and PG&E is written all over it."

Electricity costs have gotten most of the headlines because of rolling blackouts. But natural gas prices have risen higher and faster. Fortunately, they may ease faster, too.

Business isn't taking a wait-and-see approach as profits are eaten away.

Hotels are levying a utility surcharge. Restaurants are raising prices. Health clubs are increasing monthly dues. Laundromats are charging an extra quarter for a washing machine and lowering drying times. Bakers are feeling the squeeze.

In Sonoma County and throughout California, hotels are charging a $1.50 to $4 surcharge per night to offset utility costs.

The Doubletree Hotel last week added a $3 nightly charge. General Manager Bill Comstock said most customers roll their eyes at the inevitability of the extra charge, but he's had very few complaints when people understand it is connected to the ongoing energy crisis.

"If someone refuses, we wouldn't force the issue," Comstock said. "It's been very much the exception."

Comstock said utility bills at his 245-room Rohnert Park hotel have climbed from $5,000 a month last year to $20,000 this year. And vendors are charging the hotel more to offset their own utility bills.

All 150 Marriott Courtyard Hotels in the state have tagged on a $1.50 per night utility surcharge, Santa Rosa Marriott General Manager Brad Calkins said.

Starlett Bruner, owner of the Happy Hamper Laundry in Petaluma, said her monthly bills have almost tripled because of increases in water and sewer bills, electricity and natural gas. After holding prices steady for four years, she has raised her prices twice in two months.

"It's a terrible situation. It turns out I'm working for PG&E and Petaluma utilities," she said. "This is just a bad year so far."

Happy Hamper customer Christine Pitt said she wasn't surprised by the increase after the monthly utility bill for her one-bedroom apartment went from $30 to $127. But Pitt, a Kaiser pharmacy technician, said it wouldn't hit her as hard as people barely scraping by.

"I'm not bitter. I think the whole thing's kind of scary," she said. "For the people who are barely making it, on a tight budget, it will be tough."

Even health clubs are tacking on extra fees.

Rob Domont, owner of Petaluma Valley Athletic Club, said the heated outdoor pool is the club's biggest energy expense. The pool hours had to be cut back from 16 hours to eight and the monthly dues bumped up $10 in December.

Burger King in Petaluma tried a 10 cents per order surcharge. But that didn't last long.

"That wasn't a very good idea. There were just too many complaints," franchise owner Joe Rubin said.

Now he says the cost of his $1 Whopper will have to increase to help offset a quadrupling of the bill for the natural gas that is used for broiling burgers and cooking French fries. Also, his bread supplier is raising his prices to pay for the cost of heating his ovens.

"All of our suppliers are asking for increases. It's something that works its way up the ladder," Rubin said. "I think it's going to have a ripple effect throughout our economy."

Unfortunately for consumers, Rubin may be on target.

Steven Cochrane, a senior economist for Economy.com in West Chester, Penn., said he expects inflation to creep higher, to about 5 percent in the Bay Area this year, largely as a result of utility prices.

"It poses some significant risks to the California economy and the North Bay economy in the near term and long term," Cochrane said. "It's something we can't take lightly at all."

How long before high utility costs are reflected in every aspect of consumer life? Not very long at all, Cochrane said. "You will feel it pretty quickly," he said.

Cochrane, who is studying how the increases are slowing business growth and productivity, said there is no escaping higher utility costs in the Golden State. Electricity prices are likely to rise further, he said, while high gas prices may ease some.

Cochrane said California would eventually get relief when electricity prices stabilize nationwide as energy producers abandon their local markets to make more money selling to California and the West Coast states.

Cochrane said natural gas prices also will ease as the heat-dependent Northeast gets new pipelines from Canada that are expected to be completed in a year or two. Then gas suppliers will be able to ship natural gas to California, driving prices lower.

If prices fall substantially, Burger King owner Rubin said he expects businesses will be slow to lower prices again. "Historically, they go up. Very seldom do they go down."

You can reach Staff Writer Tobias Young at 762-7297 or e-mail tyoung@pressdemocrat.com.

http://www.pressdemocrat.com/local/news/14prices_a1.html

-- Martin Thompson (mthom1927@aol.com), March 14, 2001

Answers

Why does that old saying from the depression keep running through my mind?

Brother, can you spare a dime?

-- Martin Thompson (mthom1927@aol.com), March 14, 2001.

And don't take any wooden nickels.

-- Andre Weltman (aweltman@state.pa.us), March 15, 2001.