Electricity impacts how we work, play, eat, and sleep. Almost every part of your life is powered electrically — and as with all good things, that power doesn’t come free. The cost of electricity varies depending on where you live and how much you use; but no matter where you call home, it’s no small expense. According to the Energy Information Agency (EIA), the electric bill is the most expensive utility bill for the average family.
What Causes Rate Differences?
Weather is a major factor affecting both the price of electricity, and how much consumers use. Regions with mild winters and cool summers tend to require less electricity usage than areas with more extreme seasonal changes. Another price influencer is the way in which people get power — for instance, the Northeast region commonly uses oil for heating, which cuts down on electricity use. States that generate their own electricity, and then sell it to other states, usually see lower average electric bills than states with no energy production. States with small populations have fewer people paying into the system, which sometimes raises the price of resources like electricity.
In 2014, according to the EIA, 128,680,416 residential customers used an average of 911 kilowatt hours (kWh) a month in the United States. They paid an average of $0.125 per kWh, and had an average monthly bill of $114.09.
Let’s break it down by region, and take a look at the differences across the U.S. in electricity usage and price.
New England states are known for their long, cold winters. People living in this area use diverse sources of heating; such as oil or wood heat, which reduces their total electricity use. With the exception of Connecticut and Massachusetts, these states are populated sparsely, holding fewer electricity consumers than many other states. As a whole, the region’s average monthly bill comes in at $93.36. Despite paying more per kWh than the national average, the smaller rate of use means New England residents have a lower overall bill.
The North Atlantic area experiences a similar climate to New England, often enduring chilling winter seasons. It also contains some of the most heavily populated areas in the U.S., including New York City and Philadelphia. People in these areas generally live in more urban settings and large apartment complexes, resulting in a lower rate of electricity use than states where most residents live in houses. Compared to the national average, consumers in the North Atlantic use less electricity overall, but pay slightly more per kWh.
The South Atlantic’s weather conditions range from mild winters to hot, humid summers. The wide variety of rural, suburban, and urban environments creates different patterns of use. Long periods of hot, humid weather result in frequently running air conditioners, and some of the highest rates of electricity use in the country.
East North Central
The East North Central area features a mix of urban and rural areas, creating a wide range of user profiles. This area sees warm, wet summers and cold, wet winters — requiring plenty of both heating and air conditioning. Still, with the exception of Indiana, this area uses less electricity than the national average, as most residents use natural gas instead of electricity for heating. Electricity consumption is higher in the more rural areas, where it’s more difficult to get a supply of natural gas or other power sources. The price per kWh is fairly close to the national average, with differences of only a fraction of a cent.
West North Central
The West North Central region shares many factors with the East North Central, including wide ranges in temperatures, from bitter cold to extreme heat. Many of these states have low populations, making the burden for each residence greater; since fewer people paying, means fewer resources to maintain the system.
The South Central area faces many of the same climate issues as the South Atlantic, including high rates of use. In the case of larger residences, more energy is needed for heating and cooling. Some of these states are home to extensive industrial operations, which consume more electricity. There are notable deposits of crude oil and other petroleum in this area, making local energy readily available — and less expensive — than energy that needs to be imported.
The states in the Mountain region feature arid, desert, and snowy conditions. Some of these states have substantial renewable energy sources, such as solar power, wind, and geothermal. The diversity in power sources means that this area has some of the lowest monthly bills in the country — especially for those states that use less electricity overall.
With very similar climates to the Mountain region, the Pacific region also creates and sells electricity, making the overall cost less expensive than other areas of the country. Extreme heat in the southern Pacific areas makes air conditioning a necessity for almost all residents; but using solar power, geothermal, hydroelectric, and other sources eases the burden of creating electricity.
Alaskan consumers face some of the most extreme cold in the world, meaning heating is crucial. To create energy, Alaska’s many rivers and extensive oil and natural gas reserves keep costs down. Since Alaska isn’t connected to a larger grid, local providers are the only source of power to residents. Alaska had 281,438 consumers using an average of 506 kWh/month. Each kWh was $0.191, and the average bill was $115.79 a month.
Hawaii’s 425,438 residential consumers had the lowest average kWh consumption with 515 kWh/month; but each kWh cost $0.37 and their electric bill averaged $187.59 — the most expensive in the country. There are a few reasons for Hawaii’s high energy costs. Instead of one centralized system, Hawaii has an electrical system on each individual island. This keeps the infrastructure expensive to maintain, and isolated from other systems where Hawaii could purchase energy. Hawaii also has a small population, limiting how much support the system gets. Since oil and other production goods have to be imported, Hawaii pays more to buy the same goods, making electricity more expensive to produce. To lessen the burden, Hawaii is expanding the use of solar power and other energy alternatives.
Were you surprised by the most expensive regions? How do you think your electricity bill compares?