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Small businesses coping with winter electricity spike

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David E. Maxon, manager of Ontario Place Hotel in Sackets Harbor, was shocked to see the lodge’s electricity bill for the month of February was roughly four times more expensive than it was last year.

The three-story hotel at 103 General Smith Drive usually gets competitive electricity rates from Direct Energy as a member of the American Hotel & Lodging Association, but commodity prices dictated by consumer demand have driven up costs this winter, Mr. Maxon said. He said all small business owners are pinching pennies to offset utility expenses.

“It was an extreme shock. I’ve never seen an increase like this before,” Mr. Maxon said of the 31-room hotel’s February electricity bill, which rose from $972 in February 2013 to $4,029 last month. “I think that everyone is in the same boat, but it doesn’t make the boat feel any better.”

Collectively, the cost to provide electricity to the hotel for the months of December, January and February was roughly $3,000 more than last year during that three month stretch, Mr. Maxon said. He said the hotel will need to delay making investments this winter that it otherwise would have made, such as installing LED light bulbs and advertising. The hotel will need to stay on a tight budget to cover the payroll of its 11 employees.

“I could have replaced the light bulbs with that $3,000, but I’m going to now have to wait,” he said. “And this is a big hit because it stops me from advertising online, at Fort Drum and (local) restaurants.”

Helping to slightly offset electricity costs have been lower delivery charges assessed this winter by National Grid, which sends the hotel a separate bill for those fees, Mr. Maxon said. In February, the delivery charge fell by 14 percent compared with February 2013, from $541 to $467. The hotel used 14,320 kilowatts of electricity this February, but only used 11,480 during February 2013.

The hotel also plans in advance for winter expenses by setting aside savings during the summer months, Mr. Maxon said. But those savings are wearing thin this season.

“I didn’t budget for this, and I may have to borrow money now if more expenses like this follow,” he said.

Electricity costs from National Grid at Dodge, Kia and Volkswagen dealerships owned by F.X. Caprara Auto Sales off outer Washington Street in Watertown have jumped by an average of 10 percent from January to February, comptroller Dale J. Barr said. The company has paid between $2,000 and $2,500 per month to heat each of its buildings in January and February, an expense that has taken a toll.

There was only “one really nice week in January, but all of February has been cold,” Mr. Barr said.

Pete’s Trattoria on Breen Avenue in Watertown has offset increases in electricity this winter by making improvements to become more energy efficient, said Geoffrey M. Puccia, chef and owner who bought the business, formerly owned by Peter Costanzo, in the fall of 2012.

“I’ve compared my bills from last year, and it’s pretty much the same,” Mr. Puccia said.

To shave costs, the eatery became leaner last year by investing in LED light bulbs and training employees to operate kitchen equipment more efficiently, Mr. Puccia said. Those efficiencies, in turn, have helped the eatery avoid extreme electric bills this winter.

“With a restaurant, you’re always trying to look at ways to save money,” he said. “We run a schedule so that ovens go on as close to opening as possible. And when the building is empty at night, we turn off our pipes. The heat goes down to 55 degrees and up to 70 during the day. That wasn’t being done as much as it should have last winter.”

This winter, Mr. Puccia said he has been more concerned about how snowstorms keep people from going out to eat.

“That’s my biggest economic impact,” he said.

National Grid sought to offset skyrocketing electricity costs for residential and small-business customers in February with an up-front credit of $32 million that will be paid back by customers in small portions. The goal of that credit was to adjust customer bills so that total rates, including delivery and commodity charges, would be about the same as those that took effect in January.

Despite that initiative, some customers have continued to see steep increases in February, said James Denn, Public Service Commission spokesman. Commodity prices for electricity and natural gas, which utilities have no control over, have spiked excessively this winter.

“We are concerned about the extreme volatility, and we have asked Federal Energy Regulatory Commission to look into it,” Mr. Denn wrote in an email.

A letter sent Feb. 20 by the PSC to the FERC on the matter can be viewed online at http://wdt.me/m3mkPb.

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