- High power costs charge most of the US, with Hawaii and Connecticut having the highest average bills.
- Extreme weather, unstable gas markets and infrastructure investments are increasing the costs of service.
- Expanding renewable energy in countries like Colorado helped increase moderate costs.
Where you live can affect how much you pay for municipal services.
This is because the price of electricity depends on more than the price of oil and gas. It is also affected by the investments of local infrastructure services if the state is susceptible to extreme weather, and the amount of renewable energy that strengthens the network.
The latest data published by the Energy Information Administration, a US government agency, showed that residents of Hawaii, Connecticut and Alabama had the highest monthly electricity bills in 2024. Utah, New Mexico and Colorado had lower average bills.
While energy bills have increased even faster than overall inflation in recent years, the biggest burden falls on the lowest winners, who tend to spend a larger portion of their budgets for services. While President Donald Trump has promised to reduce energy prices in half by following an agenda “training, children, training” for oil and gas, energy analysts and economists told Business Insider that it is not so simple.
Extreme weather combined with explosion costs to improve the infrastructure that gives electricity across the country are promoting higher prices. Renewable energy has helped moderate prices in some countries, but the nearby tariffs in Canada and Mexico combined with the power demand for databases can only increase costs.
Energy experts shared some of the biggest factors that run energy costs and explained why there is inequality between states.
The cost of extreme weather and unstable gas markets hit the lowest winners
Since January 2020, the costs of consumer energy services have increased about 34%, compared to an increase of 23% of the total prices, the Bureau of Labor Bureau showed. Moreover, the Bank of American Institute found that the average payment of electricity, gas and water services increased 6% in January compared to a year earlier, double the increase of 3% of total inflation during this period.
These cost increases have hit people with the lowest hardest income. A note by the Bank of American Institute said that in 2023, US households with annual income under $ 50,000 spent 6.8% of their profits in natural gas and electricity, compared to 1.2% for families with an annual income more than $ 150,000.
While it is not surprising that the use of more fuel or electricity can promote customer energy bills, analysts told Business Insider that extreme weather, unstable oil and gas prices, and increasing investments of services in Poles, wires and large transmission lines that offer home energy, all contribute to cost increases.
Freezing winters – like subzero temperatures that covered the US this year – and burnt summer can promote demand for heat and air conditioning and growth costs. Municipal services are investing in aging infrastructure that carries electricity from power plants in communities and can recover those costs from their customers. Oil and gas, which still supplies most of the US electricity, is a volatile market tangible by global shocks such as Russia’s war in Ukraine.
These blows hit the new England hard. The region, which includes Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, receives more than 50% of its power from natural gas. And unlike countries such as Pennsylvania or Texas – where natural gas is underground in the region – a lot of fuel is imported to New England states. This explains why energy costs are higher than the rest of the country, said Dan Dolan, president of the Association of New Energy Generators of England, a commercial group.
Dollan said wholesale prices of electricity have fallen over the last two decades, but this has been offset by transmission costs that increase 800% between 2004 and 2023, showed data from the New England Regional Transmission Organization.
“We have also seen a dramatic increase in expenses at the distribution level as we build more substations, poles and wires at home and highly electrified businesses,” Dollan said. “Those combined elements – transmission and distribution – now make up the largest single segment of the vast majority of electricity rates throughout the new England.”
Dollan added that New England states have more aggressive climate policies, including participating in a regional cooperative that captures carbon emissions from power plants and requires them to pay for each tone they issue – another cost to customers.
On the opposite coast in California, extreme weather is running the highest service bills, which on average $ 159 a month in 2024. Services have spent billions of dollars in cost-related costs to consumers, said Brendan Pierpont, director of power-in-parting power.
These costs include investment in fire prevention, such as managing vegetation that can capture fire and bury underground energy lines, as well as legal obligations for the flames caused by their infrastructure.
Renewable renewal can slow the increase in costs
Pierpont added that some countries, including Colorado and New Mexico, have been able to moderate the increased costs of electricity in part expanding solar and wind energy.
“Many of the countries with the cheapest power and the lowest growth rate have easy access to high quality wind and sun resources,” he said, citing a letter that the author last year.
Johanna Neumann, senior director of the American Environment Campaign per 100% renewable energy, said countries that generate the highest percentage of their electricity from renewable energy sources have electricity rates below the national average, showing Iowa, South Dakota and Oklahoma as examples.
“Renews actually reduce the costs of wholesale electricity and reduce our dependence on unstable natural gas,” she said.
However, not all countries that have invested a lot in renovations have lower electricity levels than the national average. Neumann told Hawaii as an example, where she said the benefits of renewable investment are being compensated by the continued support in imported oil.
“These fuels should be sent to the island over long distances, leading to higher costs of electricity,” she said.
Texas is in a category of its own because the state’s power network is isolated from other regional ones. A deadly winter storm in 2021 that overthrew the energy and sent electricity prices that flown pushed state regulators to run power plants to better prepare for extreme weather.
While Texas has abundant sources of natural gas and is a leader in sun and wind development, the state aims to build more fossil fuel and small nuclear power plants to meet the growing demand, said Michele Richmond, Executive Director of Texas Competitive Energy Advocates, which represent electricity, including natural gas,
Richmond added that Texas has a competitive energy market, unregulated that sends the cheapest power first to help compensate for some of the cost pressures. But it is not immune from rising prices.
“We believe that having a varied mixture of fuel is good for reliability because the wind does not blow all the time, and the sun does not shine all the time,” Richmond said.
Do you have a story to share about your service bills? Contact these reporters at cboudreau@buhsinsinsider.com AND jzinkula@businsinsider.com.