Americans consume more energy in July than in any other month of the year, so this month, consumer finance website WalletHub released a report ranking all 50 states and Washington, D.C. based on their energy costs.
The results were surprising: the nation’s capital had the lowest costs, with pricey real estate markets such as California also landing in the top 10 for energy affordability. The average monthly energy cost per household in the District of Columbia was estimated at $223.
On the other end of the spectrum, Wyoming came in 50th, with its monthly cost of $355 lower only than Connecticut’s. The latter, as the 51st-ranked state, had an average monthly cost of $410.
The study took into account the costs of electricity, natural gas, heating oil and motor fuel.
Methodology
Unlike many similar rankings, the WalletHub study looked not only at energy prices in each state, but at actual energy spending. That involved factoring in eight metrics representing both prices and consumption.
Although the final figure used for each of the rankings was labeled as the average monthly utility bill per state, the researchers calculated this average based on numerous sources, rather than collecting and averaging data from real consumer energy bills.
Data was obtained from the U.S. Energy Information Administration, the Federal Highway Administration, the U.S. Environmental Protection Agency and the AAA Daily Fuel Gauge Report.
Unexpected Results
Using this method, how would it be that places like Washington, D.C. and California would rank so favorably, given that energy is very expensive in both these markets?
Much of it, the authors explained, has to do with the weather. Space heating is the largest energy expense in most homes, accounting for around 45% of average utility bills. Air conditioning comes in just behind that, accounting for up to 40%.
Even though a household in Northern California might pay a great deal for the electricity it uses — with California ranked 45th for electricity prices — the relatively moderate temperatures there mean both heating and cooling units stay idle most months of the year.
That also explains why states in New England, a region that has both wide temperature swings and high energy prices, were clustered toward the more expensive end of the rankings.
