Shocking, ‘impossible’ gas bill pushes the restaurant to the brink of closing

Gas stove on fire, blue flame.

A gas bill at Chinatown favorite Hop Woo recently was $13,656.25. With gas prices soaring, can restaurants in California continue to operate? (Myung J. Chun/Los Angeles Times)

The key to the Vietnamese restaurant’s signature soup Pho 87 — simmering for 16 to 20 hours on the stovetop — has proven to be a disaster this month. When owner Tre Dinh opened his gas bill for January, it was over $8,000.

In December, the Chinatown restaurant’s gas bill was about $800 for November use, according to Dinh. The bill he received in January skyrocketed to about $2,000, but even knowing another price hike was coming, the restaurant owner wasn’t prepared for the bill he received in January. 2. He’s one of countless restaurant owners who get a hefty January gas bill, largely because Wholesale prices of natural gas hit a record high.

The ripple effect is being felt through the homes and businesses of Southern California Gas Co.’s 21.8 million customers, with Pacific Gas & Electric also estimating high gas bills for Central and Northern California in this winter. Businesses that require gas cooking — such as Korean grill, pantry stations, gas stoves and ovens — are now costing restaurateurs thousands of dollars more than they would normally cost, leaving some owners considering temporary closures or increased price to cover costs. Add to existing concerns about inflationarysupply chain constraints and labor costs, some feel helpless.

“It’s not over yet,” said Paul Cao, chef-owner of Irvine Burnt Crumbs. “When will we get relief?”

Dinh is about to give up.

“I was writing a petition or something. I want to be against the city, against the gas company, because this is not possible.” he say. “I’m not just worried about us. I worry about the whole community.”

Dinh, whose parents opened a pho restaurant in 1987 and took over in 2018, is calling for aid to businesses struggling with gas bills. In an effort to help other restaurants in Chinatown, Dinh has changed his longtime habit of eating at his restaurant several times a day and visiting other spots in the neighborhood two or three times a week. ; he recently started eating one meal at Pho 87 and one meal at a nearby restaurant every day. As he passed many restaurants, he heard the same thing: Everyone is affected by these gas prices and all need help.

Chopsticks lift the pho noodles out of the burning pho.  Behind is a cup of Thai iced tea and a plate of basil and bean sprouts.

Pho 87 serves a variety of pho, including the popular grilled pho, with broth simmering for a minimum of 16 hours. To offset the latest gas bill, ownership is expected to increase in price by as little as $1. (Stephanie Breijo/Los Angeles Times)

“If you go out to eat — even spend about $3 on a sandwich or something — it just makes people hope that their community will be there to support them,” he said.

If gas prices remain at the same level or rise again, Dinh is considering closing the restaurant for a month in the spring. As a cold-weather staple, pho restaurants often see business decline as the weather warms; LA’s current cold snap is keeping the restaurant busier than average in February, but March and April typically mark a period of annual slowness for the store. Dinh adds that an $8,000 gas bill won’t be worth the operating costs. It will also be a choice to make a statement.

“We have to stand up for ourselves and what we believe in,” Dinh said. “If we keep opening and paying, they won’t feel it affects anyone. We can keep it open, but we won’t make any money. They will make money.” However, if he closes for a month, he will affect the employee’s salary; He is being put in a difficult situation, he said.

SoCalGas has stated that the company does not profit from the increase in the cost of natural gas.

Fortunately for Dinh, February prices will drop and the bill he receives in early March will be more manageable, according to Southern California Gas Company’s February price-per-heat. will be down 68% from January — still higher than the amount customers paid in December 2022 and still above normal for February, historically, according to for a SoCalGas executive, but fell short of last month’s spike in costs.

Whether the restaurant closes temporarily or not, Dinh knows he has to raise prices. Surrounded by notes, signed jerseys and customer sketches, he says he cares about the fans of Pho 87 as much as he cares about the local restaurant community. Transferring expenses to guests is a difficult choice for owners; he knows they’re all getting high gas bills at home, too. Traditionally, his family raised prices by 25 cents a year; With Pho 87’s latest gas bill, he admits he’ll have to bump them up from $1 to $1.50 for entrees, and he just hopes that his customers will understand.

A horizontal portrait of Tre Dinh sitting at one of the tables in his restaurant.  Behind him is a picture of wild horses.

Tre Dinh, owner of Pho 87, grew up in his parents’ restaurant before taking over in 2018. (Stephanie Breijo/Los Angeles Times)

Hop Woo Chinese restaurant three blocks away was struggling with an even bigger gas bill.

On February 9, the Liang family behind the longstanding barbecue expert opened their gas bill and saw a shocking figure: $13,656.25. Heat rates rose from a cost of $1.05 a unit in December to a whopping $3.45 in January, leaving restaurateurs who rely on gas stoves to serve their burn-in menus. pan and oven-roasted meat – fall into a state of panic.

Mary Liang said: “I was really shocked. “I had to do a double take.”

At first, they thought it was a bug; maybe someone forgot to pay last month’s bill, resulting in the overdue amount being charged to their current statement. This was not the case, and the major financial failure plus years of hardship included not only the pandemic-induced rent arrears that the family was still paying, but also the death of the family. their chefs and founders.

Liang’s parents founded Hop Woo in 1993. After 2022 the death of chef Yening “Lupe” Liang — known for his crafting skills a creative trilingual menu at the restaurant – the restaurant is mainly run by matriarch and co-founder Judy Liang with the help of her daughter, niece and other family members. The failures were felt relentlessly.

Mary Liang said the restaurant’s previous bills cost about $5,000 to $6,000 a month. They’ve been told their next bill will be much lower, but that doesn’t provide much reassurance. “It’s very uncertain as it could increase at any time,” she said. “So even if it is lower next month, we never know if it will rise again in the future.”

If another bill for that amount comes in, Liang says the operating costs won’t be sustainable. Currently, the family has arranged a payment plan with SoCalGas to pay the amount due within four months; After KCRW’s “Good Food” host Evan Kleiman shared a photo of Hop Woo’s receipt on Instagram, Liang said donations started coming in through the restaurant’s COVID-era GoFundMe page. Liang says they raised about $2,000 for their gas bill and everything helped, including a simple takeout order.

An exterior space decorated with Hop Woo's red lanterns.  A man walks past the camera.

Hop Woo, of Chinatown, received a gas bill of $13,656.25. The family is raising money to offset the high cost through the GoFundMe page. (Genaro Molina/Los Angeles Times)

The January gas bills are high far beyond Los Angeles.

Paul Cao, chef and owner of Burnt Crumbs in Irvine, said he braced himself for the rising costs after hearing about the imminent price of gas. In December, the gas bill for his restaurant was about $700 – relatively average. In January, it rose to about $1,000. When he opened the bill in February, the amount skyrocketed to $1,626.

Like Liangs, Cao says his huge gas bill is taking the brunt of the constant knocks his restaurant has suffered: After years of operating during the pandemic, he’s faced with Labor costs are high because of the shortage of workers. Next are supply chain problems and high food prices. Then the price of eggs skyrocketed.

Before COVID-19, he owned three traditional restaurants. Now only Burnt Crumbs — a brunch spot known for its gourmet sandwiches — and his two food carts remain. Like Dinh, he has to pass some of those costs on to consumers: Before the pandemic, his sandwiches cost about $10. Now they run $12.50 to $13. He doesn’t know what he will do if gas prices continue to climb.

“We can’t sell $25 bread,” Cao said. Unlike company-owned restaurants, Cao and other owners say smaller restaurants like theirs don’t have the flexibility to weather such drastic changes. “If they continue to raise the price of gasoline by 60 percent per month, we will not be able to hold out,” Cao said.

For those who depend on gas for pizza ovens, the costs are especially unavoidable.

Gas bills rise by an average of $400 at Terrace by Mix Mix, where chef-owner Ross Pangilinan serves up seasonal pizzas and fireplace-shareable plates in Costa Mesa’s South Coast Plaza. Pangilinan also owns the ReMix Kitchen Bar in Long Beach and is the owner of Populaire – a modern Cal-French bistro also on the South Coast Plaza – but said gas bills are particularly high on the Terrace because of the pizza ovens. kitchen gas powered.

“I won’t stop making pizza,” he said. “We’re going to have to review our menu and see where we can raise prices while still delivering value.”

Gas costs more than doubled — from $700 to $1,800 a month — at Breezy in San Juan Capistrano, but raising menu prices right now isn’t an option for Jasmin Gonzalez, co-owner of the company. Pacific Island-inspired brunch spot. She said her restaurant only opened in November and it would be “harmful” at this point.

“I can’t do that with our customers. When you gain the trust of customers in your community, as soon as you change something, it messes up,” Gonzalez said. “Right now, I’ll have to eat it.”

Gonzalez, also a co-owner of Primal Cut in Stanton, said she’s curious to see what next month’s gas bill will look like. If gas bills continue at this rate, she says she’ll eventually have to raise prices in the summer.

“I really wouldn’t have a choice,” she said. “At some point must give something.”

This story originally appeared in LA time.


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