U

nfortunately for all of the homeowners, utility bills steadily rise. Utilities are services that keep your home comfortable and properly functioning. These include electricity, water, sewer use, internet, phone, etc. The primary factor that impacts your expenses is the first of the above-mentioned aspects, which is electricity. In the United States, electric bills vary from state to state. We looked into the highest and the lowest bills of all states according to the data of the U.S. Energy Information Administration (EIA) as of August 2022.

How to calculate an average monthly electricity bill

Before we go into details about the difference in expenses for electricity per month in the U.S., let's first take a look at a simple formula:

Energy Used x Electricity Rate ÷ 100 = Your Energy Price

Thus, the two parameters that determine your monthly cost of electricity are:

  • the amount of energy you use measured in kWh which depends on different factors such as the size of your home and the number of appliances you have;
  • the electricity rate measured in cents per kWh.

The average U.S. household (one- or two-bedroom apartment) consumes approximately 900 kWh per month. Note that there is a difference between kW and kWh. In order to calculate your kWh consumed, you should multiply the kW rating by how many hours it was used. For example, if you clean your floors with a 1,000-watt vacuum cleaner for one hour, you consume 1 kWh of energy.

As for the average electric cost per month for Americans, it was about $122 in 2021, up from $117 in 2019, according to the U.S. Energy Information Administration. So let’s see in what states homeowners have to put up with higher expenses.

10 U.S. states with the highest average electricity bills

State Avg. electricity rate: June 2022 Avg. electricity rate: June 2021 Percentage change Avg. electricity monthly cost
Hawaii 44.09 cents 32.74 cents +25.7% $395.49
California 28.98 cents 23.11 cents +20.3% $259.95
Connecticut 25.43 cents 20.76 cents +18.4% $228.11
Massachusetts 25.2 cents 22.24 cents +11.7% $226.04
Maine 24.22 cents 16.58 cents +31.5% $217.25
Alaska 24.01 cents 23.61 cents +1.7% $215.37
Rhode Island 23.63 cents 19.74 cents +16.5% $211.96
New Hampshire 22.72 cents 19.27 cents +15.2% $203.80
New York 22.38 cents 19.56 cents +12.6% $200.75
Vermont 20.47 cents 19.36 cents +5.4% $183.62

As a rule of thumb, the states with the highest electricity cost per month are either the more isolated or the more populated regions of the country.

Hawaii generally ranks significantly higher than other states on the U.S. mainland because of the cost of imported oil. Furthermore, due to an isolated geographic location, Hawaii residents don’t have any nearby utility companies which can immediately supply power in case of a problem. That’s why reserve generating capacity is necessary for system reliability.

California holds the second position in this list because of the higher natural gas costs and investments needed to mitigate the risk of wildfires.

Connecticut's higher monthly rates are typical in the Northeastern United States. This region demonstrates a lack of natural gas storage capacity, and the cost of living there is high.

10 U.S. states with the lowest average electricity bills

State Avg. electricity rate: June 2022 Avg. electricity rate: June 2021 Percentage change Avg. electricity monthly cost
Washington 10.49 cents 10.13 cents +3.4% $94.10
Utah 11.24 cents 10.83 cents +3.6% $100.82
Idaho 11.38 cents 9.95 cents +12.6% $102.08
Nebraska 11.6 cents 11.35 cents +2.2% $104.05
Montana 11.61 cents 11.53 cents +0.7% $104.14
Wyoming 11.75 cents 12.07 cents -2.7% $105.40
Oregon 11.79 cents 11.47 cents +2.7% $105.76
North Carolina 11.83 cents 11.51 cents +2.7% $106.12
Tennessee 12.35 cents 11.46 cents +7.2% $110.78
Arkansas 12.56 cents 11.32 cents +9.9% $112.66

With 73% of energy production coming from renewable sources, Washington currently ranks No. 1 for the lowest bills in the nation.

Utah’s second place is due to the fact that the majority of energy produced there comes from coal-fired power plants. Nowadays, Utah reduces its coal dependence and takes advantage of its abundant sunshine by using more solar panels than many other states.

Now, here's the big question: what defines the state’s ranking in this list? Well, there are a lot of factors involved, such as a predominant source of power generation, logistics issues, state policies, etc. In addition to this, local prices are largely influenced by the market type. For example, they are generally lower in deregulated electricity markets like Texas, where there is competition in the generation and distribution of electricity.

While prices tend to increase every year, the tariff rate in one state – Wyoming – has actually decreased in comparison with the previous year. In August 2022, Basin Electric Power Cooperative, which provides power to cooperatives throughout Wyoming, announced a rate decrease that will save its members around $33.5 million in 2023.

Saving money on electricity: energy saving tips

Are you looking for simple answers about how to cut your expenses and stop your bills from soaring? Here are some tips on how to lower the cost of electricity per month:

No-cost ways to save on electricity:

  • Adjust your thermostat. In winter, keep your home colder when you’re not in the house and only boost the temperature when you return.
  • Bundle up with warm accessories. It's pretty much common sense that if you wear multiple layers of clothing like a cozy winter sweater or woolen socks, you will keep warm.
  • Unplug unused appliances. Even when turned off, some appliances can keep drawing power. Pull the plug on the laptops, TVs, and other appliances before going to bed.
  • Turn off your stove a few minutes before you have finished cooking – hot plates retain heat and will continue to cook your food while saving money.

Saving on electricity with little money:

  • Buy new light bulbs. Newer LED and CFL options consume far less energy than your typical halogen light bulb.
  • Check your doors and windows. Replace windows that leak air with newer models. Do the same with your doors.

Where you should invest right now:

  • Invest in energy-efficient appliances. They might be rather expensive but will save you more in the long run
  • Consider installing solar panels. The initial solar energy panel investment may be quite heavy, but eventually, you will be able to drastically reduce your utility bill. And don’t forget to apply for national and local solar incentives and rebates – they can cover the bulk of your expenses.
Posted 
Mar 22, 2023
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