January 06, 2011 Where Power Costs Are Out Of Control Power costs for industrial users increased an average of 42% from 2000-2009, or a compound annual inflation rate of 3.9%, based on our analysis of investor-owned utilities (IOUs) serving at least 50 industrial customers. But the costs of some power providers grew at a faster rate…a much faster rate!   The nearby map shows the areas of the U.S. in which IOUs experienced the fastest rising average cost per kilowatt hour for industrial customers. [Place cursor over chart to enlarge]   It probably comes as no surprise that most of these providers are in the Northeast, but there are also pockets of fast-rising costs in southwest Indiana, the Florida panhandle, and eastern Washington.   [Place cursor over chart to enlarge]   The average cost per kWh for industrial customers rose by 204% at Niagara Mohawk Power in New York, the steepest increase. This undoubtedly adds to the pall hanging over the Empire State from mounting debts and a punishing tax environment.   Average costs are not only rising rapidly in New York, but the state is also burdened with very expensive electricity. The map below pinpoints the ten investor-owned power providers with the highest average cost per kWh for industrial customers in the continental U.S. Once again, these high-cost providers are concentrated in the Northeast. The lone exception is southern California.   Insight into these and other critical site selection drivers are Walker’s special expertise. We provide rapid turnaround on empirical analyses of labor union activity, labor availability/quality, wage rate trends, tax and utility costs, and other geographically sensitive variables that impact site selection for distribution centers and manufacturing operations.   [Place cursor over chart to enlarge]