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California Ranks Last in ‘Business Friendliness,’ #1 in Electricity Cost – and Another Company Flees the State
Smithfield Foods, Inc. is joining the ever-going ranks of businesses fleeing California due to the exorbitant cost of business – and, especially, of energy – in the Golden State.
On Friday, Smithfield announced that it will cease all harvest and processing operations in its Vernon, California plant in early 2023 and begin planning to close all of its farms in the state.
“Smithfield is taking these steps due to the escalating cost of doing business in California,” the company said in a press release.
Fully 272 corporate headquarters left California between January 1, 2018 and June 30, 2021, a Hoover Institute study finds, with the rate of exit doubling in the first six months of 2021 from its full-year 2020 rate.
While California ranks as one of the worst states in terms of overall business cost, “business friendliness,” and business tax climate - the high cost of utilities is a major factor fueling the exodus, as California businesses have the highest average cost of electricity:
Highest average electricity price (17.74 cents per kWh) of 48 lower states and D.C. (Approve.com 2021 Business Cost Index)
48th in overall business costs (WalletHub)
Worst (50th) in terms of state “business friendliness” (CNBC study)
48th in 2022 State Business Tax Climate Index (The Tax Foundation)In California, the cost of utilities is 3.5 times higher per head to produce pork compared to the 45 other U.S. plants Smithfield operates, a company spokesman told The Wall Street Journal.
In addition to the high “fixed” costs of California’s electrical system, public programs like CARE and wildfire mitigation, are also driving up the price of electricity in the state, a UC Berkeley study concluded, Cal Matters reports.
“When households adopt solar, they’re not paying their fair share,” the study’ co-author Meredith Fowlie told Cal Matters. While solar users generate power that decreases their bills, they still rely on the state’s electric grid for much of their power consumption — without paying for its fixed costs like others do, Fowlie explained.
That's a new twist - blaming solar power for your high energy costs. Whatever - if the exodus continues, California's huge economy may come crashing down.
(Score: 5, Touché) by DeathMonkey on Tuesday June 14 2022, @03:01PM (6 children)
And yet, the population of CA continues to increase. [worldpopulationreview.com]
People move around for all sort of reasons and Texans even move to California.
Wake me up if their population actually drops.
(Score: 0) by Anonymous Coward on Tuesday June 14 2022, @04:29PM
Now, look at the population mix in California now, versus earlier. Productive, constructive, creative people are the ones who are leaving. You know, the people who want to actively participate in a growing, vibrant, society.
(Score: -1, Troll) by Anonymous Coward on Tuesday June 14 2022, @05:19PM (2 children)
Now do a search for "california population decline 2022" for a list of articles saying exactly the opposite.
(Score: 2) by DeathMonkey on Tuesday June 14 2022, @08:01PM (1 child)
Needing to narrow your scope to half a year is a pretty good indicator of a cherry-pick.
(Score: 0) by Anonymous Coward on Tuesday June 14 2022, @09:21PM
Okay, live in the past. This is about California today. The article linked above says "And yet, the population of CA continues to increase." Continues means, ahem, now.
(Score: 1) by khallow on Wednesday June 15 2022, @11:11PM (1 child)
Something wrong with the narrative.
(Score: 0) by Anonymous Coward on Thursday June 16 2022, @04:38AM
California numbers are known to be iffy. And then you have the southern influx to that "sanctuary state" nobody wants to count accurately, except when asking for money. Maybe U-Haul knows for sure. All that glitters isn't the Golden State:
Census Bureau Says It "Significantly" Miscounted Population In More Than 1/4 Of States In 2020 Census [notthebee.com]