The bakery employs 250 people and ships packaged cakes and desserts to major cities throughout the United States. While there are no hard figures that track the number of North County business owners who are contemplating a move out of California, anecdotal evidence is strong that high energy costs are already having a substantial impact. Nemo's raised its prices in March to cover increased utility costs, Gerhardt said. Another increase in electricity costs could force Nemo's to leave the state for someplace such as Nevada, where lower rents and utility costs could keep the company competitive. High energy costs affect bakeries in many ways, Gerhardt said.
Dairies use a lot of electricity, so buttermilk and other dairy products cost more.
And the rolling blackouts California endured recently can wipe out a day's production at a bakery As one of North County's larger electricity consumers, Nemo's is not protected by the rate cap effective for residential users and pays the going rate for electricity. Residential electricity rates are capped by the Legislature at 6.5 cents per kilowatt hour. The average market rate in recent months has been about 20 cents per kilowatt hour. California's current energy crisis began with the Legislature's 1996 decision to deregulate utility companies. The Legislature stepped in again last fall after rates began to spike in San Diego County and imposed the rate caps for residential users and small businesses.