While turning off the lights and cutting back on air conditioning may help keep energy bills in check, another way to cut energy bills may just come down to choosing where to live.
Energy bills vary widely by state, according to a new study from WalletHub, which is based on aggregate data on how much Americans across the country spend on various energy sources, including electricity, natural gas, home heating oil and fuel for their vehicles.
And the state with the highest energy costs may surprise you: Wyoming, by far.
In this vast western region, residents must pay an average of $1,591 per month, nearly double what residents of North Dakota, the second-placed state on the list, pay.
“This stark difference highlights the significant impact that geography and climate factors have on energy consumption and costs,” said WalletHub analyst Cassandra Happe.
Wyoming’s long, harsh winters and remote terrain mean homeowners there use the most and most expensive oil and gas for heating. Frigid winters in the plains of North Dakota and Iowa also mean high electricity bills.
States with the highest monthly energy costs
- Wyoming: $1,591
- North Dakota: $840
- Iowa: $798
- Montana: $787
- Minnesota: $782
But you don’t have to live in a cold climate to feel the pain of high energy bills.
Electricity consumption is also very high in warmer parts of the country, with Louisiana taking the top spot for this type of energy, followed by Alabama and Mississippi.
But Happe points out that Hawaii’s connection to electricity is surprising.
“Despite the state having the highest prices, it also has the lowest per capita consumption, suggesting that high costs may motivate residents to adopt energy-efficient practices,” she says.
The state with the lowest energy costs is New Mexico, where residents pay just $376 per year for energy. Many of the states with low energy costs on this list have relatively mild winters, of course, but others have made wise investments in efficiency and renewable energy sources like wind and solar power “that provide more affordable energy options,” Happe said.
States with the lowest monthly energy costs
- New Mexico: $376
- Arizona: $400
- Kansas: $436
- Texas: $437
- Nebraska: $453
Why are energy prices so volatile?
These costs vary for a number of reasons, including the degree of competition within states based on energy source, supply and demand and regulatory authority, said Justin Perryman, an adjunct professor at the University of Washington School of Law.
“Because states like Texas have deregulated electricity markets, there are many energy suppliers in Texas and other states, which often leads to more competition and lower prices,” Happe said.
But in states with regulated energy markets, like Missouri and 17 other states, “state energy officials set the prices,” he continues.
Using energy-efficient appliances and light bulbs can help you save money on your energy bill, but if you’re planning on making the switch at home in the near future, “simply living in a state with the cheapest energy may do more to save you money on your monthly energy bill than any individual measure,” Happe explains.
Perryman urges residents who live in deregulated markets to “shop around for lower energy rates” and apply for “incentives and assistance to improve the energy efficiency of your home,” including energy audits, insulation, new windows and more efficient appliances.
States with low energy costs can achieve this “through a combination of favorable conditions and strategic initiatives,” Happe reports.
