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PUBLISHED: 5:01 PM on Wednesday, April 23, 2008
Businesses may increase cost of services
JUNEAU - Local businesses will feel the crunch from Juneau's energy crisis on both ends as consumers scrimp and save to afford next month's power bill.

Not only will businesses see some of the highest energy bills in the city but consumer spending will likely decrease, leaving businesses with two options: either raise prices or decrease service.

Some business owners are predicting utility bills upwards of $50,000 or more next month, while small businesses are expecting bills in the thousands. Among the hardest hit will be grocery stores, restaurants and hotels, all of which run electricity 24 hours a day.

"There are two simple choices, you reduce the level of services a business might provide and turn off equipment, or do a price adjustment to accommodate that and maybe pass some on to the customer and hopefully everyone understands," said Wade Bryson, owner of the two Subway restaurants in town. "I don't expect prices to go up 500 percent because you can't pass the cost completely on to the customer. Everyone's pocket books will be hit - we're in this together."

Bryson said his initial response was to determine which pieces of equipment weren't necessary and how to further conserve energy, but aside from serving warm beverages there was little more he could do.

"We already try to conserve energy because it is a fairly large expense," he said. "My electric bill is significant each month - it's big."

Scott Perkins, owner of Jerry's Meats and Seafood, also is expecting a significant increase in his electricity bill. Perkins consolidated his frozen meat products from two freezers to one, and did the same with items in the cooler, but said there is little else he can do.

"It will mean more cost for electricity and it has to be passed along somewhere," he said. "I don't know how long it will be. When we're not busy we shut down a freezer ... but the retail cases have to be on. There's not a whole lot we can do."

Some of the larger grocers, such as Super Bear, declined to comment on how the energy crisis will impact their businesses and others did not return multiple phone calls.

One small business owner running a daycare, who asked to remain nameless, said she can't afford to raise day care costs or else she'll risk losing clientele. Her past utility bills averaged between $400-$500 monthly and she is concerned the next few months could put some small operations out of business.

"I don't wan to raise rates," she said. "We have daycare centers in town that this will drastically impact. If they can't afford to keep daycares open it will be a problem for everyone."

Bryson said he hopes some good will come out of the energy crisis, particularly a "wake up call to everybody against development."

"I think people forget we live in an isolated town," he said. "This is a minor natural disaster. We don't have an alternative energy source, or a road out. There are so many other things we aren't prepared for. We're vulnerable to the conditions of Alaska. This will forever change us."

Charles Westmoreland can be reached at charles.westmoreland@capweek.com.


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