Transmitting power over long distances is capital-intensive. A gigawatt transmission line costs on the order of $2M / mile. So if you put your gigawatt factory

Transmitting power over long distances is capital-intensive. A gigawatt transmission line costs on the order of $2M / mile. So if you put your gigawatt factory 500 miles away from the generator, the utility has to spend $1B on installing wires. They price lower near the plant to reflect their costs, and encourage energy-intensive industries to locate nearby.