Orange County, Calif., Hotels Mull Electricity Surcharge By Edith Chan, The Orange County Register, Calif. Knight Ridder/Tribune Business News

Sep. 12--Several hotels in San Diego are imposing a $2 a room surcharge to cover the surging cost of electricity. Hotels in southern Orange County served by San Diego Gas & Electric, however, have not resorted to the surcharge yet but many admit that it's tempting.

"The deregulation has raised (hotel) room rates by four to six percent," said Ed Slymen, general manager of Aliso Creek Inn in South Laguna Beach. "If we are having a surcharge, there will be a $5 to $7 per room increase in the near future."

Since June, residential and business customers who get power from SDG&E have seen their bills double or even quadruple thanks to deregulation. The measure, enacted in 1996, gradually lifts state control of electricity prices in an effort to create greater competition. SDG&E was the first utility to move into the uncharted area of deregulation

As a result, San Diego hotels are turning to their customers. The Marriott hotel in Mission Valley, for example, charged a $2 fee for hotel guests during peak tourist times. "The expense is skyrocketing," said Adley Kimittal, the hotel's general manager. "We tried to cope by conserving energy and moving some of our operations at night. Our customers are very understanding and sympathetic with our situation."

For the past three months, hotels in SDG&E cities such as Dana Point, Laguna Beach, and San Clemente saw their power costs double compared to the same period last year. The Dana Point Doubletree Hotel saw its monthly electricity bill surge from $1,300 to $2,700.

San Clemente's Best Western Casablanca Inn got a bill that was four times higher than normal, said General Manager Eric Moser. "It's getting worse and worse as the summer progresses," said Moser. "We are suffering an unjust loss of profit."

According to Luis Barrios, president of San Diego's Hotel/Motel Association, deregulation hurt the most in the summer because electricity usage goes way up: "We were impacted negatively. We have no reserve money to deal with this deregulation. It is coming from our own profit margin to deal with the increases."

In Orange County, most businesses are hesitant to impose a power fee on their guests. "We are not passing our electricity bills to our guests," said Lisa Poppin, director of public relations at Ritz Carlton in Dana Point. "We have seen an increase in electric bills, but we are working with California Electric Council to find a different solution."

Meanwhile, hotel owners are trying to cut costs. For example, the Ritz Carlton in Dana Point is shutting down its laundry during peak hours.

Days Inn Suites in San Clemente plans to get a loan to cover the costs, said General Manager Prasanna Gunawardena. "It is very difficult to cope," he said. "However, it's not fair charging our guests extra for our own electricity bills. We cannot do that to our guests."

"There's not much we can do about it, except for waiting and hoping that things will look up," said Scott Fleming, head accountant of Doubletree Hotel in Dana Point. "We are doing what we can to conserve energy."

Ed Van Herik, a spokesperson for the SDG&E, said the "dysfunctional" market could only be fixed at a federal level: "Certainly we believe that the market place can be fixed. We are looking for solutions at the framework of a deregulated market right now."

http://www.hotel-online.com/Neo/News/2000_Sep_12/k.OCE.968783877.html

-- Martin Thompson (mthom1927@aol.com), September 13, 2000