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U.S. State Energy Costs: Who Pays Most, Least

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With high per-capita spending on gasoline and hot summer temperatures that up air conditioning use, Georgia ranks among the priciest states for consumer energy costs in a new ranking. (Photograph courtesy Doug Kerr/Flickr)

The price of electricity isn’t bad in Georgia—26 percent lower than the national average, by one measure. But as a new study shows, when it comes to the energy-cost line in U.S. consumer budgets, there’s a lot more to it than how many cents per kilowatt hour the local utility charges.

WalletHub, a personal and small-business finance website, tallied the prices of electricity, natural gas and gasoline—and, significantly, took into account how much of the stuff people tend to use—to get a handle on the financial toll that energy exacts in the 50 states and the District of Columbia.

The study reveals that the range is great, from an average of $301 a month in Colorado at the low end, to $347 in New Hampshire in the middle, to $451 in Hawaii at the high end.

WalletHub said it used data from the U.S. Energy Information Administration, the Federal Highway Administration, the U.S. Environmental Protection Agency and AAA’s Daily Fuel Gauge Report to compile the rankings.

Colorado wins the derby by using moderate amounts of all three energy types, by having moderate electricity and gasoline prices, and by having the lowest natural gas prices in the country.

Hawaii’s downfall is simple to explain: prices. The state has the highest prices in each category (being an island thousands of miles from its energy sources can do that). So despite using less electricity than any state except Maine, using less natural gas than anyone, and using less gasoline than all but four states and D.C., monthly energy costs are sky high.

But that’s an extreme situation—Georgia might provide a better case study of the roles that nature, behavior and policy can play in determining energy costs.

At an average energy cost of $403 per month, Georgia finds itself closer to Hawaii than Colorado in the rankings because it uses a lot of energy. Even with its modest electricity rates, the average monthly electricity bill in Georgia is $123 (40th on a list where being first is best), according to WalletHub’s calculations, because the state ranks 41st in average monthly consumption.

Georgia does even worse when it comes to gasoline. Spending averages $217 a month there, topping even California ($192), well known for its driving culture and high gasoline prices. Georgians can’t blame it on the price of gas; only 16 states have lower gas prices than Georgia, but because the state ranks 44th in average monthly gas consumption per driver, total expenditures are among the highest in the nation.

As WalletHub notes, some factors that go into these results can’t be avoided – several months of hot, humid weather in Georgia every year no doubt keep air conditioners humming. But efficiency efforts in states could also have something to do with the results.

Georgia ranked 33rd in the State Energy Efficiency Scorecard released last November by the American Council for an Energy-Efficient Economy. The state did particularly poorly in “implementing utility-sector efficiency programs and enabling policies that are evidence of states’ commitment to energy efficiency,” with a score of 1.5 out 20, worse than all but seven states.

Georgia did better on transportation, coming in 17th place, but, notably, unlike the top six states in the rankings, it had no “vehicle miles traveled” reduction target, which the ACEEE labeled an important tool in inspiring “coordination of transportation and land use planning.” Georgia also had no greenhouse-gas emissions standards; in California, by contrast, “requirements for reductions in GHG emissions have led it to identify several strategies for smart growth,” the ACEEE said.

Note: WalletHub said it used data from the U.S. Energy Information Administration, the Federal Highway Administration, the U.S. Environmental Protection Agency and AAA’s Daily Fuel Gauge Report to compile its ranking. The energy cost per month for each state was the product of this equation, according to the site: (Average Monthly Consumption of Electricity x Average Retail Price of Electricity) + (Average Monthly Consumption of Natural Gas x Average Natural Gas Residential Prices) + [Average Fuel Price * (Average Monthly Vehicle Miles Traveled / Average Car Consumption / Number of Drivers)].