Reducing the use of air conditioning and heating may help lower your energy bills, but another key factor in reducing energy costs could be which state you reside in within the United States.
According to a recent survey by WalletHub, there is a significant difference in energy bills among the states in the U.S. The survey, based on statistical data as of June 2024, reveals how much Americans spend on various energy sources, including electricity, natural gas, home heating oil, and fuel for driving.
Surprisingly, the state with the highest energy costs is Wyoming.
In this vast western region, residents on average have to pay $1591 per month for energy expenses, nearly double the amount paid by residents in North Dakota, which ranks second on the list.
WalletHub analyst Cassandra Happe stated, “This significant difference highlights how geographic and climatic factors significantly impact energy consumption and costs.”
Due to the long and harsh winters and remote landscapes in Wyoming, homeowners use more heating oil and natural gas, resulting in higher expenses. Similarly, the cold winters in North Dakota and Iowa also mean homeowners bear exorbitant energy costs.
The top five states with the highest monthly energy costs are as follows:
1. Wyoming: $1591
2. North Dakota: $840
3. Iowa: $798
4. Montana: $787
5. Minnesota: $782
However, you don’t have to live in a cold climate to feel the burden of high energy bills.
In warmer regions of the U.S., electricity consumption rates are also high, with Louisiana topping the list in this category, followed by Alabama and Mississippi.
Happe pointed out an interesting relationship between Hawaii and electricity. She said, “Despite having the highest prices, Hawaii has the lowest per capita consumption, indicating that high costs may incentivize residents to adopt more energy-efficient practices.”
The state with the lowest energy costs is New Mexico, where residents only have to pay an average of $376 per month. Many of the states with low energy costs on this list have mild winters, and some invest in renewable energy sources such as wind and solar power, which provide more affordable energy options, according to Happe.
The top five states with the lowest monthly energy costs are as follows:
1. New Mexico: $376
2. Arizona: $400
3. Kansas: $436
4. Texas: $437
5. Nebraska: $453
According to Justin Perryman, an adjunct professor at the University of Washington Law School, these cost fluctuations have several reasons, including energy sources, supply and demand relationships, and the level of regulatory oversight by state energy authorities over energy companies, impacting the level of competition.
Happe noted that states with less stringent regulation in their energy markets, like Texas, tend to have more energy suppliers, leading to more competition and lower prices compared to regulated markets with less competition, such as Missouri and 17 other states.
To save on energy bills, using energy-efficient appliances and light bulbs is a simple idea that can help. However, if you plan on making home improvements in the near future, simply living in one of the most expensive states in terms of energy costs may outweigh any individual energy-saving measures when it comes to reducing monthly bills, Happe explained.
Perryman urged residents in unregulated markets to “shop around for lower electricity costs,” and to consider registering for “incentives and assistance to enhance your home’s energy efficiency, including energy audits, insulation, window upgrades, and using more efficient appliances.”
As for California’s ranking on this energy list, it surprisingly lands in 41st place.
The average monthly energy cost in California is $476, with electricity at $145, natural gas at $88, car fuel at $197, and home heating oil at $47.
New York ranks 28th on the list, primarily due to its colder winters which lead to higher home heating costs.