Copyright 2000 The Denver Post Corporation
The
Denver Post
September 24, 2000 Sunday 2D EDITION
SECTION: BUSINESS; Pg. M-01
LENGTH: 1020 words
HEADLINE:
Rising gas cost puts heat on many Poor, small businesses expect
winter catastrophe
BYLINE: By Steve Raabe, Denver Post
Business Writer,
BODY:
The burden of high utility
bills is about to land a chilly haymaker this winter on an entirely
new class of Coloradans.
Energy experts say two groups in particular -
small businesses and the so-called working poor - may
encounter hardships that they've never before experienced because of
this year's fast-rising natural gas
prices.
Public Service Company of Colorado last week filed with
state regulators for a natural-gas price increase
that will send winter heating bills soaring.
The state's
largest utility said rising market prices for
gas force it to pass the increases on to consumers. Projections from
Public Service show that for January, typically the coldest month of
the year, the average home heating bill will rise 40 percent compared
with last year.
For business customers, the increase will be even
steeper - an estimated 49 percent.
'My God, a 49 percent
increase,' said Ron Montoya, president of Denver manufacturing
company PlastiComm Telecommunications. 'I'm pretty concerned about
that, to be honest with you.'
PlastiComm's six warehouse-style buildings
in northwest Denver have loading-dock doors that must stay open most
of the day. That makes heating the buildings a major task in the
winter, Montoya said.
With the increase, PlastiComm's gas
bill will rise from $ 3,500 a month to a projected $ 5,215.
For homeowners and renters, the percentage increase
in utility bills is smaller but the impact could be even
more devastating.
'I'm really afraid of what's going to hit
us this winter,' said Angela Dotey, an Edgewater resident and single
mother of two young children.
'I'm going to have to cut back
somewhere,' she said, 'but I don't know where.'
Dotey works
35 hours a week doing data entry at a Denver insurance company.
After reading reports last week of big increases in
utility bills, Dotey applied for financial assistance to the
Colorado Energy Assistance Foundation, a group that pays a portion
of monthly utility bills for qualifying low-income families.
Then she got her second dose of bad news in one week.
She makes slightly too much money to qualify for payment assistance.
The maximum annual income to qualify for aid is $ 26,184 for
a family of three.
'I live paycheck to paycheck right now,
without big heating bills,' Dotey said. 'I don't know what I'm going
to do this winter.'
Cases like Dotey's are troubling to Karen
Brown, executive director of the Colorado Energy Assistance
Foundation.
In previous years, especially the past two mild
winters, families with marginal incomes have been able to handle
utility bills.
This year could be far different, Brown
warned.
The first hurdle is that many people who would qualify
for financial assistance are unaware of programs that could help
them. Brown's organization and other groups such as the Low
Income Energy Assistance Program and Energy $ aving Partners are
seeking to increase their visibility as winter approaches.
But even with awareness of the programs, thousands
of Colorado families in the working-poor category may not qualify
for help if, like Dotey, their incomes are just above
assistance levels.
Last year, 2,667 Colorado households that
applied for bill-paying help were denied for not meeting income
guidelines.
This year, working poor is defined as an individual with
a full-time job paying $ 7.42 an hour or less, or a family of
four with two wage earners making no more than a combined $ 31,448
a year.
The average winter-season benefit also has been
raised from $ 324 per family last year to a projected $ 450 this
year.
For businesses, financial grants don't exist.
'Small businesses are the first ones to feel the real impact,' said
Chris Chavez, Denver-based spokesman of the U.S. Small
Business Administration.
He said companies' energy problems
are compounded by the increasing cost of wages and benefits as well
as other costs such as transportation and debt.
'They run
with such small (profit) margins anyway,' Chavez said. 'When you
combine all of those increasing costs and add energy on the top,
you're going to see a serious problem.'
When oil prices began a steep
rise earlier this year, President Clinton asked the SBA to make $ 86
million in government-backed loans available to small businesses
struggling with oil-related costs.
So far, there is no
indication of similar programs becoming available for high
natural-gas costs.
The financial impact could be very high for
Denver-based Dependable Cleaners, which pays an estimated $ 15,000 to
$ 20,000 a month for natural gas.
The fuel is used to fire
boilers that make steam, used in most steps of the dry-cleaning
process, said Dependable president Steven Toltz.
'We need to
make sure we're operating as efficiently as possible,' he said,
adding that Dependable has a full-time technician charged with
keeping boilers running cleanly and smoothly.
Toltz said he's
experimenting with a new, oversized boiler that may require less gas
to produce the same output.
A decision hasn't been made on whether
dry-cleaning prices will go up because of higher costs, he said.
'We're just going to have to wait and see,' Toltz said.
'If it's a cost we can absorb, that's what we'll try to do.'
Even before natural gas prices shot up early this year,
a survey by the National Federation of Independent Businesses
showed that concerns about energy costs were increasing among
members.
'I haven't gotten too many calls yet about gas prices,'
said Tim Jackson, Colorado director of the NFIB. 'But once the
bills start hitting, we'll definitely start hearing about that.'
Heating bill help
Several Colorado agencies offer assistance to
low-income households in paying utility bills and weatherizing homes:
Colorado Energy Assistance Foundation: 303-825-8750
Low Income
Energy Assistance Program: 800-782-0721
Energy $ aving Partners:
888-432-8546
GRAPHIC: PHOTO: The Denver
Post/John Prieto Ron Montoya, president of PlastiComm Telecommunications, is
worried about his company's heating bills this winter. Colorado Energy
Assistance Foundation Who needs energy assistance in Colorado The Denver Post
Gas price hikes
LOAD-DATE: September 25, 2000
