Posted on 04/19/2024 2:13:04 PM PDT by nickcarraway
Utilities inflation arguably hurts restaurants more than higher food and labor costs
Every time Oakland restaurateur Geoff Davis looks at his PG&E bill, he feels helpless.
“I talk about it a lot with my friends. It’s a big line item for us,” the chef-owner of Burdell told SFGATE. “Last month [PG&E] was like 40% of our rent. It’s an insane amount and obviously this is my first time being an owner, but I know from other places that I’ve worked that it wasn’t this big of a number.”
It’s an expensive time to run a restaurant — or to eat at one. Increased food and labor costs are driving up prices across the board. Commercial utilities, such as water, gas and electricity, have also risen significantly in the last year, according to five restaurant owners who spoke to SFGATE about the effects of commercial rate hikes.
In the Bay Area, where monopolies such as PG&E are often the only utility options, restaurateurs like Davis, a finalist for the coveted James Beard Award for Best Chef in California, have few alternatives other than to foot the bill.
(Excerpt) Read more at sfgate.com ...
“In the Bay Area, where monopolies such as PG&E are often the only utility options”
That is the way it is everywhere in California when it comes to electricity, gas, water and probably that way throughout muc of the country. I have never had another option in Kalifornia other than cable / phone service. The San Franmarxist Gate just stirring it up.
“Gonzales Yang says Piglet & Co does as much as it can to save on energy, such as replacing all of the lights with energy-efficient bulbs, using prep machinery like blenders before peak hours kick in and running the ice machine overnight, when rates are lower.”
“Peak hours” charges, like Ma Bell used to do?
I haven’t heard of that before. Can anyone comment if they do that in your region?
The local utility is always a monopoly. Because it is a natural monopoly, as it is uneconomic to run parallel physical services - double gas pipes, power lines, etc.
CA utility rates, not just PG&E, are driven mainly by state mandates, such as, in this case, the forced investments in “green” everything.
Interestingly in CA municipally owned utilities like LADWP (Los Angeles Department of Water and Power) are exempt from the costly mandates imposed on utility companies. Hence LADWP benefits by being able to buy cheap electricity from coal plants in Arizona.
I can opt in to a “peak hours” model. I can get a constant rate at one price or have prices based on usage during peak and off peak. I went with the constant rate model as setting the thermostat on my air conditioner properly in summer keeps the rate even.
I tried on peak/off peak and decided single price was a better fit for me.
What’s the average household power bill there? Ours here in the PNW, WA was $110/mo.
Mine was unusually low last month but mostly due to temps. In general I think mine is +20% the last 12 months (both gas heating winter and electric A/C summer). A lot of this is due to PG&E upgrading electric after the fires it sparked.
In general CA rates are very high due to green nonsense and I look forward to moving to a nuclear state soon (another benefit of exiting Kalifornia).
Operating expenses go up. So prices have to go up. Then less people eat out. So layoffs and more days closed result.
Ripple effect.
Not so. A number of municipalities have their own utilities. When I lived in Santa Clara, electricity was 40% less than PG&E. In Roseville at this time it’s closer to -75%. PG&E is so regulated it is practically an arm of the state government. I hardly need to tell what happens to affordability and efficiency when the government is in control
BlackRock/CCP is buying up San Francisco for pennies on the dollar.
“Just the idea that a PG & E bill can be 40% of the rent in the Bay area is just plain wrong, “Markist” newspaper or not.
Additionally, having no competition is just plain wrong as well!
I don’t disagree with point No.2 but it is unrealistic. Look at the first line of Post No.5 as to why.
As for your point No. 1 “why rates are so high” If you think the Utilities have free reign to set rates you would be wrong. You get what you vote for in Kalifornia and that is one party, regulated, “commissions” dictating what will be. And as you have undoubtedly have read in the last few years it’s all starting to collapse in Kalifornia.
Meanwhile they want to ban gas stoves, ovens, and grills.
I inherited about 2300 shs of PGE preferred stock from my late Dad. These were long term investments that he had held for many years. Those preferreds paid 4.5%, 4.8%, 5%. Those were nice returns back in 1% interest rate days.
When the fires hit in 2017, PGE suspended the dividends and all the preferreds dropped by about $4 per share. [Preferred stocks always trade around $25 and are more or less considered bonds.] They are lower now, under $20 last I checked.
So when those fires hit, I lost 2300 * $4 = about $10K and since then, 7 years of 4.5% * $25 lost dividends * 2300 = 2500-2800 per year = ~~$18K.
Cost me about $28K that day. Oh, the good news? PGE reinstated their dividends. A penny a share. Glad to hear their CEO made $16 MM last year.
“Not so. A number of municipalities have their own utilities. When I lived in Santa Clara, electricity was 40% less than PG&E. In Roseville at this time it’s closer to -75%. PG&E is so regulated it is practically an arm of the state government. I hardly need to tell what happens to affordability and efficiency when the government is in control”
I never lived in those communities, so my Statement is correct. I NEVER HAD OTHER OPTIONS in So Cal.
“Can anyone comment if they do that in your region?”
Absolutely.”
I use one of those oil-filled heaters in my little cabin in the winter. it does a pretty good job but it is utterly voracious in terms of power consumption.
I’m showing on my last PGE bill:
peak usage @ .51536 / kWh
off peak: .48701 / kWh
outrageous.
It seems to me that this problem would be amenable to Elon’s Powerwall, or a variant on that.
Instead of buying electricity at peak hours, charge batteries from the grid at off-peak hours and then switch to battery power during peak hours.
If you live in, say, Palo Alto or Santa Clara you have no choice but the municipal utility.
Its a natural monopoly. You cant run multiple sets of pipes and wires.
No sympathy. These idiot Californians continue to vote in democrats and their policies in year after year. When that happens there is no real free enterprise and you get things like the PG&E bills. Tough.
In SoCal outside of LA you are in SoCalEd territory (Southern California Edison, SCE).
Nice guys, did a lot with them.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.