May 2, 2001

  Text of Statement: Karen Kerrigan,
Chairman, Small Business Survival Committee

At the launch of:
Alliance for Energy and Economic Growth
May 2, 2001

The Small Business Survival Committee and its 70,000 members nationwide are extremely pleased to be a part of this very important effort being launched today. Both the current and future challenges that face our country on energy matters are critical issues for our nation's small businesses and entrepreneurs who are really dependent on a reliable and affordable supply of energy to continue to do what they do.

Small and mid-size firms are critical to our nation's economic well-being, creating 100 percent of net new jobs; they account for 47 % of sales in the nation; and are responsible for the bulk of innovation and vibrancy in our economy.  This is the reason why they are called the engines of economic growth - a reliable and affordable supply of energy is necessary to keep these engines healthy and productive.

For our members, and for many small business owners across the nation that we have spoken to in recent months, higher energy prices have indeed become a major topic of concern. Especially so given the dim outlook for persistent instability and volatility in energy prices. Already, economic uncertainty and a slowing of the economy has caused many small firms to make adjustments -  unfortunately the added blow of higher energy prices - and the potential for unrelenting high costs - puts small businesses especially in a state of economic angst and turmoil.

For those of you who know small business owners, or follow this sector, it should come as no surprise that double-digit increases in the cost of electricity, natural gas or oil have raised the anxiety level among entrepreneurs.  They are exceptionally price sensitive - meaning a notable increase in any expense or line-item impacts the entire business. There's no hiding these unforeseen costs.  There's no spreading these costs around. For small firms that are looking at energy cost increases in the double-digit range, really requires dramatic changes in business operations. This includes a vast scaling back of expenses - equipment investments, pay raises or new benefits for employees, or unfortunately, jobs.  Raising prices is an option - but it's a tough one for small businesses facing tough competition, especially those who are facing much larger competitors.

You can't just slap an energy surcharge on your product or service like they are beginning to do in California, and do that on a long-term basis without hurting the business or hurting consumers.

This chain reaction created by the way small businesses respond to higher energy costs, indeed impacts not only the business itself, but impacts employees - jobs and job creation -- consumers, local vendors and entire communities that are interdependent on the health of their local business sector. Small and mid-size businesses comprise 99% of the businesses in this country - when these businesses endure hardship, it impacts the families and individuals living in those communities.    

Small businesses want and need more energy supplies to help keep cost low. They want and require reliable delivery of that energy whether through wires and pipelines.  And they want energy-efficient improvements in appliances and equipment, to help keep costs down for the goods and services they sell.

The engines of economic growth, and really economic growth itself, depends on energy. It all begins with energy. And if we, as our country, wish to continue our standard of living made possible in large part by the activity of entrepreneurs, reliable and affordable energy is key to that.

Again, we are very pleased to be a part of the Alliance for Energy and Economic Growth. I am very optimistic about the prospects for bipartisan consensus regarding a solution for a comprehensive U.S. energy strategy, and we look forward to doing our part working with the Alliance and the small business community to ensure that this indeed does occur.  

The Alliance for Energy and Economic Growth is a diverse alliance of small business owners, economic development groups, manufacturers, electric and natural gas utilities and energy producers that has been formed to help put in place a national energy policy that meets long-term consumer demand for reliable energy at reasonable prices, while protecting the environment. For more information about the Alliance, you can visit its website at www.yourenergyfuture.org.