Like it or not, Boulder City's electric rates for residential and commercial customers will shoot up this summer like a red-hot thermometer as officials cope with the higher price of electricity increasingly being supplied by providers outside the city's traditional major source -- Hoover Dam.
According to Electric Utility Administrator Ned Shamo, the lingering drought has caused Hoover Dam to produce less electricity than it normally does, which has required the city to buy a larger share of more expensive power from the Glen Canyon hydroelectric power plant in Utah and from Nevada Power Co., which uses a lot of high-priced natural gas to generate its power.
"Last year was the first year our supply from Hoover Dam fell below 50 percent," he said, "and I don't see things changing for a while."
As a result, homeowners and businesses are facing a 20 percent to 25 percent rate increase this July that's needed to pay the providers and re-establish the city's utility fund that's been drained because of transfers to help pay off the Boulder Creek Golf Club's debt.
The price increase may be felt at home, but it will surely be felt at businesses that cater to their customers.
Chiarelli's Deli is a major user of electricity, with its coolers that have to maintain a temperature of 38 degrees or below, the refrigeration tables that store perishable food and condiments, the steam tray table, the coffee machine, the bottled drink cooler, the display cases, the lights, the air conditioning, and the list goes on.
"We've gone two years without a price adjustment except for a few items last October, November, December and it upset some people," Chiarelli's co-owner Richard Assalone said. "I'll hold off as long as I can. If my power bill goes up 20 percent, especially during the summer months, (raising prices) is something I'll have to think about. Short of raising prices, I suppose I could cut employment, but I can't do that. I'll never cut the portions and we'll never jeopardize the quality. As a last resort, I guess we'd do a price adjustment."
Chiarelli's average monthly power bill ranges from $300-$350 and goes up an extra $100 during the summer because of the air conditioning.
Last year, the Assalones bought a five-ton air conditioner for $4,000 and got a $500 rebate from the city, which helped with purchasing the necessity that may end up being affected by the higher power costs.
"We can't change the thermostat because we have to worry about customer convenience," Assalone said. "We wouldn't want the customers to be uncomfortable. When we fill this place up, there's a lot of body heat, especially in the summer. Maybe the first month we'll have to bite the bullet and see how hot it gets."
Noting that the utilities are "nickel-and-diming us to death," Assalone said not only has the price of power gone up, but so has natural gas, water, sewer, the trash bill, food and supplies.
"Playing with nickels and dimes is one thing, but when you're playing with dollars you've got to constantly monitor your costs to see where you are," he said. "It just gets tough. They always talk about residential rates, but they never talk about how they're crucifying their commercial customers."
Another major electrical customer is Al and Carrie Stevens' Coffee Cup restaurant, which had a bill in March totaling $1,047, but would expect, without a rate increase, that their summertime bill would be $1,600 to $1,800.
A 20 percent jump would make the summer bill range from $1,920 to $2,160.
For the Stevens, efficiency and conservation are the buzz words they intend to use to keep the doors open.
"I guess we don't have much of a choice even though we know this is going to impact us hard," Al said. "We're going to have to add a new $6,000 air conditioner that's more efficient, change all the light bulbs to fluorescents and pre-cool the attic with an evaporative cooler. We're going to have to spend a bunch of money to save a bunch of money."
Milo's Best Cellars, on the other hand, will be hit less hard than the others, said General Manager Dave Rivera.
"Our bill is about $900 to $1,500 a month, depending on the season and the air conditioning," he said. "We'll try to pick up the difference by turning four or five more tables a month. We're not going to pre-emptively raise prices and raise fear. Raising prices would be a last resort. We'll just watch our costs closer and get a few extra tables a week."
Unlike Chiarelli's or the Coffee Cup that work on small margins with comparatively low-cost items, Milo's is a high-end restaurant that charges premium prices because of its major items -- wine and alcohol -- and therefore expects less of an economic impact from the rate increase.
"We're going to have to have a maintenance service come in once a month to make sure everything is running efficiently and switch a couple of coolers to make things more efficient, but even still, 20 percent is a ridiculous jump," Rivera said. "We could have prepared better if it was like 5 percent a year, but 20 percent is a big jump to adjust to. It's a shocker."
All three restaurateurs noted that whenever there's a rate increase, much attention is placed on the homeowner, but it's the small business owner that gets hit twice -- at work and at home.
"The council people hit us at a higher rate, 25 percent more, which is 5 percent more than the residential increase, when it should be just the opposite," Stevens said. "We get hit with so many fees as it is. As a small business man, I'm taxed and feed almost out of business. If I raise prices, we'll lose some business. We just have to work smarter and operate smarter."
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