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High Energy Costs: Factor in California Business Exodus

by Marlo Lewis on April 18, 2011

in Blog, Features

“California is experiencing the fastest rate of of companies relocating to out-of-state or out-of-country locations since a specialized tracking system was put into place two years ago,” reports business relocation coach Joseph Vranich. Seventy companies completely or partly moved their operations out of California since Jan. 1, 2011 for reasons other than business expansion. 

Vranich says the 70 “disinvestment events” understate the exodus of capital and jobs from California: ”It’s estimated that only one out of five losses becomes public knowledge, if that.”

Why are companies leaving the Golden State? As you might expect, California’s out-of-control spending, high taxes, and burdensome regulations figure among the top 10 reasons. Vranich, however, recently added high energy costs to the list:

The #10 Reason (New!) – Unprecedented Energy Costs: The California Manufacturers and Technology Association states that commercial electrical rates here already are 50% higher than in the rest of the country. However, a law enacted in April 12, 2011 requires utilities to get one-third of their power from renewable sources (e.g., solar panels, windmills) within nine years. Look for costs to increase by another 19% in many places to a whopping 74% in Los Angeles. Such new burdens along with upcoming regulations stemming from the “California Global Warming Solutions Act” set potentially overwhelming obstacles to companies here as they try to meet competition based in other states and in foreign nations.

 For many years, California Democrats — notably Rep. Henry Waxman and Sen. Barbara Boxer — have been at the forefront of congressional efforts to enact cap-and-tax and promote EPA’s greenhouse power grab. Waxman and Boxer have worked tirelessly to export California’s energy (or anti-energy) policies to the rest of the nation. They continue to push the “California model” as the path to a “clean energy future.” Vranich’s report is a sobering reminder of how foolish it would be for the nation to take their advice.

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