Feeling Powerless

It Takes Electricity to Start a Business?!

California's energy crisis isn't just affecting existing entrepreneurs. The hidden casualties in areas like San Diego County? Prospective entrepreneurs.

"San Diego is fairly good at entrepreneurial startups; that's been our history. And it's always expensive to do business [here], but you take that as part of the scenario," explains Kelly Cunningham, research director with the San Diego Regional Chamber of Commerce.

But the economist says the escalating energy prices have had a chilling effect on startups. After electricity costs spiked in June and July, the number of new business licenses issued dropped 15 percent in August 2000, 25 percent in September and 25.6 percent in October, according to Cunningham. That slide follows a steady upward trend.

Where the States Stand

Deregulation legislation or order enacted: Arizona, Arkansas, California, Connecticut, Delaware, District of Columbia, Illinois, Maine, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Virginia, West Virginia

Ongoing commission or legislative investigation: Alaska, Colorado, Florida, Indiana, Iowa, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, North Carolina, North Dakota, South Carolina, Utah, Vermont, Washington, Wisconsin, Wyoming

Source: Energy Information Administration

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This article was originally published in the April 2001 print edition of Entrepreneur with the headline: Feeling Powerless.

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