Report: Pinpointing the Highest Energy Cost States

A study by the U.S. Global Change Research Program reported that heat waves are occurring more frequently throughout major cities in the U.S. than they used to. This means higher energy usage, especially in metropolitan areas. Coupled with inflation, it also means higher overall energy costs.

The Winner Is . . . Wyoming

But which states have the highest energy costs? According to a WalletHub analysis, residents in the Wyoming are at the top of the chain, paying $845 a month in energy costs. On the opposite side, the District of Columbia residents paid an average of $274 a month in energy costs.

In determining the ranking, WalletHub analysts compared total monthly energy bills in each of the 50 states and District of Columbia. The analysis focused on a formula that considered electricity, natural gas, motor fuel and home heating oil.

Getting back to Wyoming, the state ranked 42^nd in monthly electricity costs and 24^th in monthly natural gas costs. But it ranked #1 in monthly motor-fuel costs and monthly home heating-oil costs. Meanwhile, DC ranked 17^th in monthly natural gas costs. It ranked 51^st in monthly electricity costs and motor-fuel costs, and 41^st in home heating oil costs.

Hawaii Ranks #1 in Price, #51 in Consumption

Other data generated by the analysis includes the following:

• Hawaii ranks #1 in electricity price, while Washington State is in 51^st place

• Meanwhile, Hawaii is in 51^st place when it comes to electricity consumption, while Louisiana is in first place

• Hawaii also is ranked #1 in natural gas prices, versus Idaho, which is in 51^st place

• Alaska has the highest consumption of natural gas per consumer; Arizona has the lowest

Experts Weigh In

WalletHub also asked experts about what generated higher energy costs in certain states versus others. “The regulatory regime varies from one state to another, and that affects power company costs,” said Robert Gmeiner, assistant professor of financial economics at Methodist University. “Across states, and even within states, electricity rates and sometimes natural gas prices are regulated by local or state governments.”

Meanwhile, Center for Sustainable Energy at Notre Dame Director Peter C. Burns pointed out that the price impact comes from a mix of energy sources across the country. “For example, in Hawaii, primary energy is largely from oil, which is imported at considerable expense,” he added.

Also adding to the expense is infrastructure. “The costs of moving and distributing energy, as well as state policies regarding energy efficiency and environmental impact, also contribute to varying energy costs among states,” said Karen Clay, professor of Economics and Public Policy — Carnegie Mellon University’s Heinz College of Information Systems and Public Policy.