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Tuesday, Dec 5, 2023

AGRICULTURE—Power Rates Threaten Local Farms

ESCONDIDO , Bob Crouch grows mushrooms, but he’s the one who may soon be in the dark.

As the owner of Escondido-based Mountain Meadow Mushrooms, he’s seen his electricity rates jump in the last few months , from $47,000 to $70,000. He’s worried he may not be able to pay his bills, and he might even be facing bankruptcy.

“It may put me out of business,” he said. “I’m a very small mushroom farmer. In fact, I’m one of the smallest farms in California, and perhaps the United States.” Mushrooms require cool, cave-like temperatures to grow , temperatures as low as 62 degrees. That means refrigeration, and that’s costing him dearly, he said. “I’ve already lost more money in the last two months than what I’ve made all the rest of the year. And obviously, you can’t stay in business that way,” Crouch said.

If Crouch is forced to close his farm, it will cost the community 70 jobs and a $2.5 million payroll, he said. This is typical for the area, said Karen Mills, associate council with the California Farm Bureau Federation. Farmers in San Diego County and southern Orange County are being socked with high energy bills.

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“It’s playing heck with their bottom line,” she said. “For agriculture, there’s a little bit less flexibility (with energy use), with the demands of whatever crop there is, in terms of being able to shift the load.”

Local Farm Problem

The problem is not a statewide phenomenon. Farmers with Southern California Edison or Pacific Gas & Electric as their providers have not seen similar price spikes, Mills said.

Also, some local farmers have been more affected than others, depending on the crop. Different crops have different demands, Mills said. Mike Milano Sr. is one of the luckier ones, but he also is feeling the pinch. As co-owner of San Luis Rey-based flower growers Milano & Co., he’s seen his bill go from $6,500 in April to $18,500 this month. The higher bills come even as the flower grower uses less electricity. Milano compares his latest bill with the month of May, when the company had a $12,000 bill, he said. May is an electricity-intensive time because of the Mother’s Day holiday. The high volume of sales for the busy holiday means more flowers are cut, and cut flowers must be kept refrigerated, Milano said.

By contrast, the summer months are slow, meaning there is less need for refrigeration. Summer months also have longer daylight hours, meaning growers don’t have to run their growing lamps as much, he said.

Usage Already Down Still, Milano can’t reduce his energy use any further. He must run the growing lamps for the flowers to bloom, while the refrigerated temperature is very critical to keeping cut flowers fresh, Milano said.

Nor can Milano reduce his company’s electricity consumption by becoming more energy efficient. His company met with a San Diego Gas & Electric Co. business representative five years ago, and the company has already installed all available energy-saving measures, he said.

Milano is also looking into other electricity providers to see if they can provide competitive rates with SDG & E;, he said. As a flower grower, he uses a lot of electricity, most of it during off-peak hours, which means many companies would be interested in having him for a customer, he said.

Bert Verger, who, along with his son, Don, owns the San Pasqual Valley-based Verger Dairy, is much more worried. High electricity rates may make it impossible to stay in the dairy business locally. Verger comes from a proud family of dairy farmers dating back to the 15th century. As a young man, he left Holland to open a dairy farm in San Diego and has been at it ever since.

Future Uncertain

Now he’s not so sure how much longer he can stay here. Most local dairy farmers in the area have already moved to the Central Valley, he noted. Part of the problem is the high cost for electricity. Verger’s July bill was $12,000, compared to $6,000 just the month before. He hasn’t even looked at his August bill yet. Of the electricity he uses, most of it goes toward irrigation. The high cost of energy , and therefore water , makes it almost impossible to compete with dairy farmers in the Central Valley, who face only a nominal charge for water use, he said.

“We don’t get enough for our milk to pay for all this electric,” he said. “If we pay all these high charges for electric, property tax and everything else, it’s almost impossible to keep dairy in this part of the country.” Don Verger noted the dairy is facing a 106 percent markup in electricity costs at the same time prices he gets for his milk are expected to fall. Even so, he remains optimistic. He expects prices for electricity will go down once the summer heat wave ends, and he has no plans to leave San Diego anytime soon. His family has roots here, he said. “We love it down here. The weather’s too good, and if we can make it here, we’ll make it here. We’ll stay here if we can,” he said.


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