News Column

Calif. Ranks 6th in Energy Costs, Small Business Group Says

June 7, 2012

Jan Norman

Energy sector

California has the sixth highest energy costs among the states in 2012, according to a new report by the Small Business & Entrepreneurship Council, a Washington, D.C., advocacy group.

"Energy Cost Index 2012: Ranking the States" looks at a combination of the price of regular gasoline at the pump and the cost of electricity.

Click on the gas tank photo to seek the 10 states with the highest combined costs.

"High energy costs take a heavy toll on consumers, as well as on businesses of all types and sizes," the report says. "That is most certainly the case with small businesses that so often operate on very thin margins."

In California, the cost of gasoline ranks third highest behind Hawaii and Alaska. However, the Golden State's electricity costs (average revenue per kilowatt hour) ranks 10th.

The gasoline prices are based on Automobile Club data on May 21, 2012 and electricity costs are state revenues per kilowatt hour through February, 2012, from the U.S. Energy Information Administration.

Almost three-fourths (72%) of small business owners recently polled said that higher gas prices are impacting their businesses, and 43% said that their business might not survive if energy prices continue to rise.

The cost of fuel and of electricity are impacted by many factors, the report notes, including government restrictions on energy production, instability in such oil-producing regions as the Middle East and North Africa, value of the dollar, resource availability, government regulations and subsidies and taxes.

"Energy cost differentials between states speak to the competitiveness of each state in terms of attracting and keeping businesses," the report says.

The states with the lowest energy costs are:




--Iowa and Kentucky (tied)

Source: (c) 2012 The Orange County Register (Santa Ana, Calif.)

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