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Electricity costs taking a bite out of restaurant business

Members of ASORE testify during a Senate hearing Tuesday on the effects of rising electricity costs.

Members of ASORE testify during a Senate hearing Tuesday on the effects of rising electricity costs.

Payroll, food and electricity represent the three major expenses for Puerto Rico restaurants, which are feeling the crunch of rising costs all-around, Restaurant Association President Carlos Morell said Tuesday during a public hearing at the Senate.

An internal survey by the trade group known as ASORE revealed that 85 percent of the island’s 4,000 restaurants saw their monthly electricity bills increase by between 10 percent and 40 percent during 2013, he said during a hearing held by the Senate’s Energy Affairs and Water Resources Commission, which is analyzing Senate Resolution 600 that is probing the effects of electricity costs.

“We know of restaurants whose monthly bills range between $6,000 and $8,000,” Morell said, adding that “despite investments in high-efficiency equipment, electricity costs in most cases exceed the income of a restaurant.”

The survey in turn reflects that 71 percent of participants identified services provided by the Puerto Rico Electric Power Authority as “poor.”

Despite the different initiatives the government has explored to lower energy costs, restaurants have not seen any savings on their operational costs, given the increase in water costs, coupled with other taxes such as the national patent, Morell told lawmakers.

“This reality not only makes it impossible to create new jobs, but strongly impacts the ability of restaurants to retain the jobs already created and continue operating,” he said, noting Puerto Rico’s restaurant industry generates about 6,000 direct jobs and pumps about $3.9 million into the island’s economy.

In his testimony on behalf of ASORE, Morell recommended that lawmakers promote renewable energy and a “serious and immediate” review of energy subsidies granted through legislative measures.

The review should consider capping those that are absolutely necessary, to “promote good savings and energy use,” he said.

Author Details
Author Details
Business reporter with 30 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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