North Bay businesses look for ways to cut costs as PG&E plans energy rate hike March 1

Will Seppi wasn’t surprised to learn PG&E will be raising its rates on March 1. It’s hardly the first time and certainly won’t be the last.

But the president and CEO of Healdsburg-based Costeaux French Bakery is positioned to manage as best he can what will amount to approximately an 8.4% increase for small businesses, according to PG&E.

“We contract out for our gas prices, so we fix them in the best we can on an annual basis to allow us to manage some of the costs,” Seppi said. He also has shifted times for his baking crews to avoid PG&E’s highest rates, which are between 4 and 9 p.m. on weekdays, according to the utility.

On Feb. 10, the Public Utilities Commission voted unanimously to allow PG&E to increase its rates starting March 1. The PUC must approve any rate changes sought by PG&E and any other investor-owned utility in California.

Paul Doherty, a PG&E spokesman, told the Business Journal that the utility’s higher costs are “being driven by a few factors and market forces: recent California drought conditions which have reduced lower-cost hydroelectric generation across the western U.S., and by higher natural gas and wholesale electric energy prices seen in 2021 and forecasted to continue into 2022.”

A May 2021 California Public Utilities Commission report found that PG&E rates increased by 37% since 2013 and are projected to increase by an average 3.7% annually between 2020 and 2030, according to a Feb. 12 article in The Press Democrat, which noted other California investor-owned utilities’ rates have also gone up.

“We’re in a pattern now of unusually high annual rate increases,” Steven Weissman, an energy policy expert and a lecturer with the Goldman School of Public Policy at the University of California, Berkeley, told The Press Democrat.

PG&E spokesman Doherty said the utility doesn’t profit from its increased costs.

“What we pay for our customers’ energy supply, both natural gas and electricity, we pass through directly to our customers,” he said.

That doesn’t bring much solace to Tom Finch, owner of Filippi’s Pizza Grotto in downtown Napa.

“We’re already paying premiums and they keep going up,” Finch said, adding he can’t adjust the operating hours of his restaurant in order to take advantage of lower rates during the daytime.

“I can't tell my customers to come in at lunchtime, or come in the mid-afternoon,” he said. “Being a restaurant, your lights are on, your ovens are on, your gas is going because you're open. So it's kind of difficult to change.”

Finch said he’s done everything he can in his restaurant to minimize energy costs.

“I've already had PG&E out here years ago; they changed out all of my light bulbs and everything is LED,” he said, adding he also has timers on the bathroom lights and storage rooms.

“I'm as energy-efficient as I can be, but it still costs a lot a lot of money,” Finch said. “It's one of my highest spends every month.”

Schecky Miluso, co-owner and chief operations officer of Napa Nuts in Napa, noted his company’s PG&E bills have consistently gone up for years. He pulled bills going back to 2016.

“We’re luckily a big enough business where this is part of our overhead,” Miluso said.

Napa Nuts, which operates out of a 4,800-square-foot warehouse, pays about $600 a month in the summer to keep its products cool. In the winter, the utility bill drops by about half, he noted.

Miluso said he would like to make some energy-efficient changes like he’s done at his house, but his hands are tied because Napa Nuts doesn’t own the warehouse.

“We’ve got a lot of flat roof here that's not being utilized and just soaking up extra sunlight,” he said.

Seppi, on the other hand, is in a position to go solar, and he has.

“We have a solar array on our facilities in Healdsburg, and we are getting ready to energize a solar array on our production plant as well,” said Seppi. “So recognizing that costs were continuing to go up, it was one of the investments that we decided to make, not only for the cost side of it, but for the environmental components of it as well.”

Cheryl Sarfaty covers tourism, hospitality, health care and education. She previously worked for a Gannett daily newspaper in New Jersey and NJBIZ, the state’s business journal. Cheryl has freelanced for business journals in Sacramento, Silicon Valley, San Francisco and Lehigh Valley, Pennsylvania. She has a bachelor’s degree in journalism from California State University, Northridge. Reach her at cheryl.sarfaty@busjrnl.com or 707-521-4259.