Gov. Walz’s 100 percent carbon-free electricity mandate would make electricity more expensive for businesses
In Part 4 of this series, we discussed how the Walz Proposal would increase electric bills for Minnesota families by an average of $137 per month. In Part 5, we discuss how the proposal would increase electricity costs for businesses by an average of $9,900 per year.
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Increasing costs for businesses
Commercial electricity customers accounted for 32.6 percent of all electricity sales in the year 2020, according to the U.S. Energy Information Administration (EIA). Rising electricity costs force businesses to raise the prices of the goods and services they offer or reduce staffing or other expenses to help offset additional energy costs.
Under the Walz Proposal, commercial customers would see their electricity costs increase by an average of $9,900 per year, every year through 2050. Costs peak in 2040, when the average commercial electricity customer would pay an additional $17,698 that year for consuming the same quantity of electricity they used in 2020.
In the LCD Scenario, businesses would see their average annual expenses increase by $2,829 per year, and costs would peak at $6,712 in 2040.
The cost of electricity is a concern for businesses of all sizes, but rising prices would be especially harmful to small businesses for whom energy costs constitute a more significant portion of their overhead.
If we want a thriving small business community, increasing the cost of energy by an average of $9,900 per year, every year through 2050, is a massive step in the wrong direction.
Large industrial customers will also be harmed by rising electricity costs because these firms use massive quantities of electricity. These impacts will be discussed in Part 6.