California’s soaring energy costs are no longer an abstract policy debate.

They are becoming visible in the form of closed factories, shuttered refineries, and families losing jobs that once sustained entire communities.

From Sacramento to Benicia, a growing number of industrial employers are concluding that operating in the nation’s most populous state has become financially unsustainable.

One of the most symbolic closures was announced in June 2025, when Blue Diamond Growers revealed that it would permanently shut down its flagship almond processing plant in Midtown Sacramento.

The facility had operated continuously for 110 years, processing almonds for breakfast tables across the United States.

The plant occupied 53 acres, employed roughly 600 workers, and featured six‑story processing towers that had long been a landmark of the city’s industrial history.

Company executives insisted the cooperative was not in financial distress.

Jeff Hatfield, senior vice president of manufacturing, told reporters that Blue Diamond’s balance sheet remained healthy.

The problem, he said, was efficiency.

The layout of the century‑old facility required almonds to be moved long distances between processing stages, driving up operating costs and limiting automation.

Behind the technical language was a simpler reality.

Sacramento had become too expensive.

For workers like Christy Rudken, the closure represented more than a corporate decision.

Her mother, grandmother, and great‑grandmother had all worked at the same plant, making four generations of employment under one roof.

She told local media that while the shutdown was not entirely unexpected given the age of the facility, the loss still felt like the end of a family legacy.

Blue Diamond announced that operations would be consolidated at newer plants in Turlock and Salida in California’s Central Valley.

Layoffs would begin in early 2026 and continue through mid‑2027, eliminating 600 jobs in Sacramento.

The cooperative’s headquarters will remain in the region, but the historic plant will fall silent for the first time since 1915.

The closure was not an isolated case.

Across California, industrial employers are confronting energy prices that now rank among the highest in the nation.

On January 1, 2024, average residential electricity rates in California reached between 30 and 34 cents per kilowatt hour, according to state and federal data.

Only Hawaii recorded higher prices.

The national average stood near 16.5 cents.

For a household using 500 kilowatt hours per month, that difference translates into a bill of $150 to $170 in California, compared with roughly $60 in Texas or $55 in Louisiana.

For businesses, the gap is even wider.

Commercial electricity prices in California averaged 29.31 cents per kilowatt hour in August 2025, more than double the national average of 11.75 cents, according to data from energy consulting firm Rebel Energy.

Manufacturing plants that operate heavy machinery around the clock face annual power bills running into the millions.

Much of the increase stems from wildfire mitigation spending approved by the California Public Utilities Commission.

Since 2018, utilities have been authorized to collect roughly $27 billion from ratepayers to pay for undergrounding power lines, vegetation management, and infrastructure hardening after a series of catastrophic fires sparked by utility equipment.

Pacific Gas and Electric, the state’s largest utility, has raised residential rates nearly 70 percent since 2020.

The average combined electric and gas bill climbed from about $170 in 2020 to nearly $300 by 2025.

Peak summer rates on time‑of‑use plans now reach 50 to 62 cents per kilowatt hour in some regions.

State regulators acknowledged the burden in late 2025 by proposing to cut utilities’ allowed return on equity to historic lows below 10 percent.

Consumer advocates said the reduction was too small to produce meaningful relief for households or businesses.

Industrial employers began responding even before the most recent increases took full effect.

In April 2025, Valero Energy announced that it would idle, restructure, or cease refining operations at its Benicia refinery by April 2026.

The plant, located 35 miles northeast of San Francisco, employed about 400 workers in high‑skill positions such as engineers, welders, and operators.

Contractors and suppliers added hundreds more indirect jobs.

For months, employees hoped the announcement might be a negotiating tactic.

Refineries in California had survived previous threats.

This time, the closure proved permanent.

In January 2026, the Vacaville Reporter confirmed that layoffs would begin in March, eliminating 237 of the facility’s 348 remaining positions.

The economic consequences extended well beyond the refinery gates.

A city‑commissioned study found that Benicia faced a sharp decline in tax revenue, forcing officials to consider service cuts and budget reductions.

The refinery had represented one of the city’s largest taxpayers and a major source of funding for public safety and infrastructure.

The loss also raised concerns about fuel supply.

California already imports about 10 percent of its gasoline from other states and countries.

Industry analysts warned that refinery closures would increase dependence on imports and push prices higher.

Andy Lipow, a petroleum market analyst, told CNN Business that shorter gasoline supplies would require California to attract imported fuel month after month, raising prices on a sustained basis.

Together, the Blue Diamond and Valero closures eliminated roughly 1,000 direct industrial jobs within a year.

Economists estimate that each manufacturing or refinery position supports about 2.

5 additional jobs in surrounding industries, from transportation and maintenance to retail and food service.

By that measure, the two closures alone could cost more than 2,500 total jobs across Northern California.

The pattern is repeating across the state.

Phillips 66 has reduced operations at several facilities.

Smaller manufacturers have quietly relocated to Nevada, Arizona, and Texas, where electricity costs are often less than half of California’s rates.

Commercial real estate brokers report rising vacancies in older industrial buildings, as landlords struggle to find tenants willing to accept long‑term leases under current cost conditions.

Businesses that remain are adapting in ways that reveal the pressure they face.

Energy consultants say companies now conduct micro‑efficiency audits, shifting production schedules to off‑peak hours, renegotiating power contracts directly with renewable suppliers, and delaying equipment upgrades.

Households are making similar adjustments, running dishwashers at midnight, limiting air conditioning, and searching for cheaper electric‑vehicle charging stations.

State leaders argue that the spending is necessary.

Wildfire risks remain severe, and the 2018 Camp Fire, sparked by PG&E equipment, killed 85 people and destroyed the town of Paradise.

Regulators say hardening the grid is essential to prevent similar disasters.

The economic costs, however, are increasingly visible.

From 2013 to 2025, electricity rates rose at least 90 percent for customers of California’s investor‑owned utilities, according to the state’s Office of Public Advocates.

During the same period, national inflation increased by less than half that amount.

The policy debate has become polarized.

Republican lawmakers cite the closures as evidence that California’s energy mandates are driving industry out of the state.

Democratic leaders counter that long‑term sustainability and public safety require heavy investment and that the economy will adapt.

History offers mixed lessons.

Germany’s rapid transition to renewable energy produced some of Europe’s highest electricity prices and a partial return to fossil fuels.

New York’s renewable mandates have contributed to rising rates and grid reliability challenges.

Hawaii has long recorded the highest electricity prices in the United States, and while its economy adapted, energy remains a persistent burden.

California now appears to be entering a similar adjustment phase.

More automation is likely.

Data centers powered by dedicated solar farms are expanding, while traditional factories decline.

Warehouses and logistics hubs are replacing refineries and processing plants in some regions.

Specialized workers with technical skills may continue to find high‑paying jobs, but many displaced employees will be forced to retrain, relocate, or leave the labor force altogether.

The transformation carries risks for local governments.

Cities that relied on industrial tax bases face shrinking revenues and difficult choices about schools, policing, and infrastructure.

Communities built around single employers must reinvent themselves or confront long‑term decline.

For workers like Christy Rudken, the changes are deeply personal.

Her family’s four‑generation connection to Blue Diamond will end when the Sacramento plant closes.

Similar stories are unfolding in refinery towns and manufacturing corridors across the state.

California’s economy is not collapsing.

Silicon Valley remains a global technology center.

Hollywood continues to produce.

Agriculture still feeds the nation.

But the industrial landscape is shifting in ways that will define the state’s future for decades.

Energy costs now sit at the center of that transformation.

With another $27 billion in wildfire mitigation spending already approved and additional utility rate cases pending, most analysts expect prices to continue rising through 2027 and beyond.

Within five years, California may look fundamentally different: fewer refineries, fewer legacy factories, more automated facilities, and more businesses headquartered elsewhere.

The experiment in aggressive energy policy is far from over.

Whether the benefits ultimately outweigh the costs remains uncertain.

What is clear is that the consequences are no longer theoretical.

They are measured in closed gates, empty buildings, and thousands of workers searching for what comes next.

As other states watch closely, California has become a national case study in how energy policy, climate goals, and economic reality collide.

The outcome will shape not only the future of the state, but the direction of American industry itself.