Dumb Founding Questions

I attended the ERC Board Meeting yesterday and listened to a presentation by Jon Gregory representing Innovate North State and “530” Angle Network.  He was making the case for funding business start ups in the 530 Area Code. Creating business and jobs in the northern end of the state, including Grass Valley and Nevada City.

Near the end of the Q & A following his presentation, some one from the back of the room asked Jon, “With all the regulations and infrastructure cost in California, why would anyone start a business here”?  Or some thing close to that, as my notes are not complete, my fountain pen ran out of ink and the backup quill was dry.

Jon had no good answer for the question.  It is clear California’s energy rates are going up. The question is how much? The California Energy Commission has projected electricity will cost 26 percent to 42 percent more by 2020. But it could go much higher, according to a recent study by the Navigant Consulting Group.

So, what kind of a business would you start with soaring energy costs? Cost that can be contributed to the cumulative impact of California’s three big environmental initiatives:

  • The mandate that electric utilities get 33 percent of their power from renewable sources
  •  The carbon cap-and-trade auction and,
  •  The low carbon fuel standard.

Jon Gregory made the point that our video business cluster is going away, the manufacturing going off shore and the remaining engineering capacity being purchased and consolidated out of the area.

The question is what will be the replacement in our local economy?  Does it make sense to start a business that requires energy in a state with soaring energy cost?

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About Russ Steele

Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.
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One Response to Dumb Founding Questions

  1. Russ Steele says:

    Wholesale electricity market prices spiked about 70 percent over last year. So reports the Independent System Operator that manages California’s electric transmission and distribution line grids. The reasons given by the ISO are: Natural gas prices rose about 50 percent over the unusually low gas prices of 2012. Most of the remainder of the increase in electricity market prices was attributed by the ISO to the implementation of the state’s greenhouse gas cap-and-trade program. A decline of about 25 percent in hydroelectric generation also modestly increased electricity prices. – See more at: http://calwatchdog.com/2013/09/05/enviro-policies-spike-ca-electricity-prices-70-percent/#sthash.degi8aFk.dpuf

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