How to Cripple Utah's Economy

For decades, Utah has worked hard to bring in better paying jobs. St. George provides a good example of this work – and a good example of how to bring economic progress to a halt.

Realistically, the economies of states largely follow the national economy. However, there are a few things state governments can do to boost or undermine their own fate. One specific thing Utah could do to hurt its economy would be to increase energy prices.

In south St. George, some enterprising individuals teamed with the City of St. George, the State Trust Lands Administration, and the Dixie-Escalante Rural Electric Association, to create the Fort Pierce Industrial Park. Without manufacturing, touristy places like St. George can develop very unhealthy economies. Through Fort Pierce, largely because of fantastic energy rates, St. George has placed itself on the map for clean manufacturing. The jobs that are being imported and created in the industrial park are fantastic, and, through the multiplier effect, those jobs are inuring to the broader benefit of the community and the State.

And, by the way, the affordable power for Fort Pierce is generated in the Uintah Basin, at the coal-fired Bonanza Power plant. Utah is a coal state.

One of the employers in Fort Pierce is Blue Bunny ice cream. Because of the affordable power rates, Wells Dairy decided it would make sense to produce lots of ice cream in St. George. Raise its power rates, and Blue Bunny loses its reason for being here -- as do other manufacturing businesses and prospective businesses sensitive to the costs of inputs (meaning, all manufacturing businesses).

Utah has some unique aspects that can help attract or repel business development. One of the best things Utah has going for it is affordable power. The Legislature knows this and is extremely concerned that Utah might lose this advantage.

By contrast, no matter what it does, California is looking at much higher energy costs in the future. Because businesses are extremely sensitive to higher energy costs, what can California do to keep from losing businesses to neighboring states in the future? Get them to take steps that will lead to higher energy rates. Let’s not take that bait.