Side Street Inn owner Colin Nishida joked recently about putting up a windmill above his Honolulu restaurant/bar because of higher electricity costs.

His latest monthly electric bill was just under $7,000, up from about $5,800 a year ago.

"Painful? Yes," Nishida said. "Signing the check is way more painful. But I guess sitting in a hot room is worse."

Nishida is among the many local business owners who have been coping with rising electricity costs driven by higher oil prices. The growth in electric costs comes at a time when businesses are dealing with increased expenses in other areas such as gasoline and shipping, and could eventually lead to higher prices for consumers.

The typical "small" business using about 1,200 kilowatt hours a month paid $224.14 last month for electricity, up from $192.09 a year ago — a 16.7 percent increase, said Hawaiian Electric Co. spokesman Peter Rosegg. Almost all of the increase is from higher fuel prices, he said. HECO's small-business category includes shops and small restaurants.

Billings for medium to very large businesses, which typically range from bigger restaurants and retail stores to large hotels and shopping centers, are more specific to each business, which makes calculating typical bills in these categories difficult, Rosegg said.

Nishida's case is an example of how a medium-size business — his restaurant seats about 130 people and is open 16 hours a day — is affected. He has been absorbing the higher electric costs to avoid raising prices and is "banking on doing more volume to offset some of those rising costs." But if bills keep going up he will eventually have to increase prices, he said.

Nishida has been taking steps to save energy, such as installing more efficient air conditioners and closing down sections during slower periods. In the meantime, he has no choice but to continue paying more for electricity.

"It's something that we cannot do without," he said. "Small-business owners are just going to have to pay the price."

Hawai'i power utilities are allowed to pass fuel costs to residents and businesses through an "energy cost adjustment" charge, which varies monthly depending on the cost of fuel when it is used. Utilities are allowed to charge only enough to cover fuel costs and not to add to profits.

HECO has said the adjustments don't necessarily reflect current crude oil prices because it buys long-term contracts, stores fuel, and uses residual low-sulfur fuel oil, which is in a less competitive market than other types of fuel.

Still, the O'ahu utility's fuel adjustment charge has more than doubled since August 2003 to a nearly five-year high last month at 5.55 cents per kilowatt hour.

"I don't think there's any doubt that in general over the course of the last year or two, most businesses have seen their costs go up," Rosegg said. "The thing about a business is they can take steps to reduce their energy use and we help them do that. We give rebates, we give technical advice.

"We have an awful lot of programs that will help people to save money, including just changing light bulbs to more efficient bulbs. We give a company or a building a rebate if they'll tint their windows so they don't have to use so much air conditioning. ... So there are a lot of incentives for businesses to try to keep their energy costs under control, and we give awards out every year to companies that do the most effective job of that."

Tom Jones, co-owner of Gyotaku Japanese Restaurants, said even though he's using less electricity, his monthly electric costs for his two restaurants increased to $11,800 from about $10,400 a year ago.

"We are looking at different ways that we can reduce our energy consumption, but we've been doing that for a long time, so I'm not sure how much more efficient we can get," Jones said. He said one restaurant has a heat recovery unit for the air-conditioning system, which will probably be done for the second restaurant.

"The restaurant industry is particularly affected by this because the two major consumers of electricity, the two major drivers, are heating and cooling, and we do both of that in a big way," said Jones, a past chairman of the Hawai'i Restaurant Association. "So the restaurant industry is very energy-dependent, and that's just another cost that we're seeing going up now."

Barry Wallace, senior vice president of operations for Outrigger Hotels and Resorts, said increases in electric costs to cool and light the hotel chain's rooms range from about 12 percent to 19 percent over last year.

"It's painful," he said, noting that other costs, including labor, are rising as well. "We are having a banner year from an occupancy point of view, so we feel that the bottom line is going to be OK. But the years are not always going to be this strong and that kind of increase in cost per occupied unit dramatically raises costs.

"We have not yet adjusted the price the guests pay for that. But inevitably that will work itself into our pricing models."

Wallace said Outrigger has been working on ways to be more energy-efficient, such as installing motion-activated thermostats. For years air conditioners in the rooms turned off when the sliding door to the lanai is opened, and Outrigger's new Waikiki Beach Walk project, which is under construction, includes a cooling system that is more efficient.

Glenn Watanabe was shocked to learn that electric costs for his family's business, Waipahu Florist, increased from about $425 to more than $500 in less than a year.

"Wow, if I knew the electricity was costing us that much, I would turn off the lights when we leave the room more often," said designer/owner Watanabe. "We just take it for granted. We have air conditioners, lights, we just let it go. I think we'd better conserve now."

Other businesses are thinking the same.

While higher electricity costs have been a burden on many Hawai'i companies, they have boosted business for Energy Industries LLC. The Honolulu-based company specializes in energy-management and conservation programs for commercial and industrial customers.

"We're much, much busier than last year," said Duane Ashimine, Energy Industries' executive vice president. He estimated that business at least doubled from a year ago.

"We've been getting calls from commercial properties," Ashimine said. Last month they were "pretty close to exhausting their full annual electricity budget. ... When you do the budget for the next year on your energy, you base it on previous years' history. Of course you assume certain escalations, but ... it's just beyond what anybody could have guessed."

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.