Many don't consider it, but where you live can have a large impact on your overall energy expenses. In fact, according to ElectricityRates.com's analysis, moving from one of the most expensive areas to one of the least expensive could net you an extra $149.02 a month.
But don't pack your bags just yet. While your location can influence how much you pay for energy, much of it still comes down to the choices you make. So by understanding what's in your control and what's not, you will be able to make better energy decisions and spend less no matter where you live.
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Average Energy Expenses By State
Using each state's average energy consumption and rates, we were able to calculate average energy costs for each state in the US.
What Affects A State's Overall Energy Costs?
While there are too many factors that influence a state's energy costs to list them all, there are three that have a significant impact on average rates and consumption:
- Access to Resources – Influences average energy rates for the state.
- Climate – Influences average energy consumption for the state
- Appliances & Fuels Used – Influences average consumption and rates
Access to Resources
Key Takeaway: A state's access to energy resources influences average energy rates for the state. The cheaper it is to acquire and use these fuels, the less it will cost the consumer.
Hawaii: High Cost To Transport Fuel = High Electricity Rates
Hawaii has the highest average electricity rate in the US at 30.28 per kilowatt-hour (kWh), almost 2.5 times higher than the national average. This is because a significant portion of Hawaii's electricity is generated by petroleum, which must be shipped into the state.
Transporting fuel by ship is expensive and drives up the cost of electricity. It's much cheaper to transport it through pipelines, which is what most other states rely on, but this is not possible for an island in the middle of the Pacific.
This is why Hawaiieven with its low average electricity consumptionhas the most expensive average electric bill in the US.
New England: Limited Natural Gas Supply Increases Energy Rates
In New England states, the supply of natural gas is limited because of a lack of natural gas storage facilities. This limited supply increases average natural gas rates.
This limitation actually increases average electricity rates for many of these states as well, as natural gas generates the bulk of their electricity. This combination of high natural gas and electricity rates is why New England states have some of the highest average energy expenses in the US.
Key Takeaway: Half of the average American household's consumption goes towards heating and cooling. Because of this, a state's climate has a large impact on average energy consumption in the state. The higher/lower temperatures get, the more energy residents of those states will consume.
The South: Hot Summers Increase Electricity Consumption
Average electric bills from southern states are some of the highest in the US, but it's not because of high electricity rates. In fact, electricity rates in states like Texas, Alabama, South Carolina and Mississippi are lower than the national average.
But the South's climate consists of long, hot and humid summers. To keep homes cool, air conditioners must run longer, and this drives up residential electricity consumption in these states.
Alaska: Cold Winters Increase Natural Gas Consumption
Of course, the opposite applies as well. While Alaska has affordable natural gas rates for residents, brutally cold winters increase overall consumption and natural gas expenses. This leads to the state having the highest average natural gas bills in the country.
Appliances & Fuels Used
Key Takeaway: The appliances and the fuels those appliances utilize can have a significant impact on overall energy expenditures. Often, a state's access to resources and climate will influence the appliances and fuels homes use.
The South: High Rates Of A/C & Electric Heat Use
Because of the South's hot and humid climate, these states have the highest percentage of homes that use air conditioners. On top of this, 56% of homes primarily use electricity for heating, which is significantly higher than all other regions of the country. These two factors likely contribute to the high overall electricity consumption and expenses in the South.
New England: Heating Oil Use Further Increases Energy Costs
New England states are a great example of how appliances and fuels used can influence how much residents pay for energy. Many homes in this area still use heating oil as their primary heating source, something most other states switched away from a while ago because natural gas was significantly cheaper.
As we've already touched upon, natural gas in New England is expensive. It's still cheaper than heating oil, but not cheap enough for many to justify the cost to switch over to it. But with the region's cold winters, heating oil expenses can add up and further increase the already high energy costs for these states. In fact, New England residents using heating oil spend an extra $20.65 a month compared to natural gas on average.
What Does This All Mean For You?
When it comes to where you live, there are certain things that you can't control that will impact how much you spend on energy. However, the personal choices you make matter and can help lower your energy bills.
Here are a few things to keep in mind no matter where you live:
- Home Size & Characteristics – The smaller and better insulated your home, the less you will need to spend to heat and cool it.
- Equipment & Fuels You Use – Research energy rates in your area and try to purchase energy-efficient appliances that use the cheapest sources.
- Look For Utility Programs In Your Area – Many utility companies have state-backed programs to help you save through rebates on energy-efficient products, services and more. For example, Massachusetts residents have Mass Save and Connecticut residents have Energize CT. Look on your utility's website to see what it offers.
- Take Steps To Lower Consumption – Check out ElectricityRates.com's guide to lowering your energy bills to learn more about all the different ways you can cut back.
And lastly, check to see if you live in a state with Energy Choice. These states allow their residents to switch electricity providers, which lets them compare electricity plans and switch to the provider with the lowest rate.
If you do have Energy Choice, ElectricityRates.com can help you find the perfect plan for you. Enter your ZIP Code above, and you can compare great rates from multiple providers in your area side by side. After you find the plan you like, you can switch directly on the site for free in minutes.