In Berkshire County, where three paper mills have closed and a water bottling company has balked on plans for a new facility all because of the high cost of power, small and medium-size businesses are reeling.

Local economic development officials are seeing the hills that they must climb to attract new businesses — and retain existing ones — grow ever steeper as Western Massachusetts Electric Company (WMECO) continues to increase its commercial rates for power.

This is the setting that U.S. Sen. John F. Kerry chose for a field hearing of the Senate Committee on Small Business and Entrepreneurship, during which local business leaders will testify on the cost of energy and the effect it is having on their ability to make a profit and maintain employment levels.

The hearing, titled "The Rising Costs of Energy: Challenges and Opportunities for Small Businesses," will convene Wednesday at 10 a.m. at Berkshire Community College in the Susan B. Anthony Building's cafeteria, 1350 West St., Pittsfield.

"The Berkshires is facing a very tough challenge, as it has for a number of years," Kerry said during a phone interview from his office in Boston. "It's a concern, and the more we can build a record that shows what's happening in different parts of the country with regard to small business, we build a record for legislating and to find what remedies there might be."

Other field hearings held

Kerry said the committee has conducted field hearings in New Orleans, Maine and other locales, depending on the topic. Pittsfield was chosen for this one because the steep rise in the cost of energy has resulted in some acute problems for local businesses.

"This is a huge issue now, and it's growing in its importance because it has such a bottom line impact immediately," Kerry said. "All of a sudden, the products you're delivering cost you more money to produce. It's a real pressure on the economic structure."

He noted that, among all the factors involved in the rising cost of energy, the rapidly increasing worldwide demand may be the most important.

"One of the things we want to do is get committed to clean energies, clean technologies," he said.

He said Congress already has been trying to move the nation to renewable energy sources.

Kerry cited a bill that was passed by the Senate Finance Committee last year that included "major incentives for alternatives and renewables — it would have encouraged people to buy hybrid cars and retrofit their homes, but we got beaten back by the oil industry."

Six witnesses scheduled

There are six witnesses scheduled to testify to the committee so far: state Attorney General Martha Coakley; North Adams Mayor John Barrett III; state Secretary of Energy and Environmental Affairs Ian A. Bowles; Jef Sharp, president and CEO of SunEthanol Inc. in Hadley; Michael Supranowicz, president and CEO of the Berkshire Chamber of Commerce; and David J. Manning, executive vice president of U.S. External Affairs for National Grid.

"I'm going to basically tell them how it has an impact on our economy," Barrett said. "I don't care what anyone says, I think this is a direct result of futures trading in (oil) commodities contracts, and it's been allowed to go on unchecked. And I think there is gouging going on. It's a direct result of greed, and it's been allowed by the federal government."

Barrett said he is very concerned about local residents and businesses and what they'll do to heat their homes next winter.

"The free enterprise system is great, but when it's jeopardizing the country, something has to be done about it," he said. "It is a national crisis, and it will take severe action to make it right."

Supranowicz said that, in New England, the playing field is tilted more and more to other regions of the country because of the cost of energy for small and medium-size businesses.

"From a chamber standpoint, we want to talk about the fact that the electricity costs are way too high in Massachusetts and in the Northeast in general," he said. "It certainly puts our small businesses at a disadvantage. One main reason is competition — it's getting harder and harder to pass these costs on to the customers of these businesses, so they're forced to absorb more, and it's having a real bad impact on their bottom line."

Recent ruling

A recent ruling issued by Coakley's office noted that WMECO poorly communicated a price increase of 55 percent for electricity used by local businesses in early 2007 — a cost increase that had catastrophic impacts on the local paper industry and on others — and noted that the company has requested another 30 percent midyear increase for local businesses.

Supranowicz said the chamber is encouraging all of its members to attend Wednesday's hearing. And although no verbal comments from the audience will be accepted, members of the business community are welcome to submit comments for the record in writing to the committee.

"We encourage them to do so," Kerry said.

To reach Scott Stafford: sstafford@berkshireeagle.com, (413) 664-4995.