[Congressional Record Volume 147, Number 18 (Thursday, February 8, 2001)]
[Senate]
[Pages S1218-S1220]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. FEINSTEIN:
  S. 286. A bill to direct the Secretary of Commerce to establish a 
program to make no-interest loans to eligible small business concerns 
to address economic harm resulting from shortages of, and increases in 
the price of, electricity and natural gas; to the Committee on Banking, 
Housing, and Urban Affairs.
  Mrs. FEINSTEIN. Mr. President, I am very proud today to introduce 
legislation designed to help small businesses hurt by the power crisis 
in the Western United States.
  This bill authorizes funds for the Economic Development 
Administration to operate a revolving loan fund to assist small 
business owners in California and other States affected by the 
shortage.
  This fund will help dozens of small manufacturers with so-called 
``interruptible contracts'' that have been forced to lay off employees 
and, in many cases, close their doors.
  Interruptible contracts are defined as price discounts to users who 
agree to

[[Page S1220]]

reduce consumption during peak demand periods.
  But while companies can withstand infrequent power interruptions, the 
fact is that California has been hit hard by the electricity crisis and 
the service interruptions have come far too frequently.
  Today, even small business owners who chose not to join the 
interruptible list--and opted instead to brave the higher gas and 
electric bills--have found the price spikes too much to handle.
  Sadly, many of these firms have discovered that they too are being 
forced to shut down because they can't pay their electricity bills. 
Here are a few examples of companies that have been affected:
  A small business owner in San Diego operating a fluff-and-fold 
laundry facility was forced to close when his December electricity bill 
jumped fourfold to $4,000. At this time last year, his monthly bill was 
roughly $1,000.
  The Saint-Gobain Calmar company--a plastics manufacturer in Los 
Angeles with roughly 300 employees--has been forced to stop production 
22 times in the past six months because of the business' 
``interruptible'' status. Although the company has been able to avoid 
layoffs up to now, the owners say the outlook is not good.
  Another example is the McKoen and Associates potato-flake plant in 
Tulelake, California. The owner of the facility says he may be forced 
to lay off about 100 employees permanently due to the mandatory shut 
downs.
  While all California companies, both large and small, are feeling the 
crunch of the power shortage, smaller firms are taking a larger hit 
because these companies pay a larger percentage of their budgets to 
energy and gas bills.
  Small businesses, classified as those with 500 workers or fewer, 
employ 37 percent of the California's total workforce.
  This current power drain has led to higher costs for businesses 
throughout the Northwest.
  Some aluminum and paper manufacturers in Washington and Oregon have 
already been forced out of business--and they are not alone.
  The bill I am introducing today authorizes $25 million for a 
revolving no-interest loan fund to be operated by the Economic 
Development Administration.
  The bill allows small businesses, as defined by the Small Business 
Administration to be eligible for loans if their monthly gas or 
electric bills are at least double what they were a year ago.
  If a company's gas bill, for example, was $4,000 in the months of 
January, February, and March 2001 and the company averaged only $2,000 
in January, February, and March 2000, that company is eligible for a 
loan.
  The legislation will allow small business customers of the Pacific 
Gas and Electric Company, Southern California Edison, or San Diego Gas 
and Electric who are not covered by a State-mandated cap to apply for 
the no-interest loans to stave off lay offs, re-hire employees, and 
keep their facilities up and running.
  Small business that were covered by a State cap on energy expenses 
will not be eligible for the loan program.
  The bill is designed to help both small business owners who opted for 
the ``interruptible list'' and those who tried to brave the cost spikes 
and failed.
  The legislation will not affect those who are not covered by a State 
mandated program that caps retail electric commodity rates.
  I believe this measure will be of great assistance to the hundreds of 
small businesses in the Western region that are facing skyrocketing 
costs for power.
  I urge my colleagues to join me on this important legislation to help 
keep these hard working businessmen and women from being forced to lay 
off employees and close their doors.
                                 ______