Business energy costs and the pains of reducing them are probably not at the top of the mind of the average cubicle-dweller, but this could change if a clear connection is drawn between energy cost reduction and job growth, as in a study conducted by Management Information Systems, released Feb. 21.
The study found that over the past 10 years, states with lower business energy costs grew 25 percent faster and created 60 percent more new jobs than states with higher business energy costs.
Because the fuels used to produce electricity vary from state to state, so do energy costs for businesses. Coal tended to cost less, natural gas the most, as its cost rose 87 percent between 2000 to 2005 (compared with 28 percent for coal). Electricity prices overall rose about 19 percent, but were stabilized by large uses of coal.
Hawaii, California, Vermont, Massachusetts and New York had the highest energy costs while North Dakota, Alaska, Wyoming, Louisiana and Indiana had the lowest.
The average growth in employment in the 10 states with the lowest costs was 3.3 percent, compared with 2.1 percent in the 10 states with the highest costs. The average state ranking in terms of employment in the 10 lowest cost states was eight points higher than the average ranking of the 10 states with the highest costs, 14th compared to 22nd.
Suddenly, lumps of coal don’t seem such ominous gifts.