These states spend the most on energy

Story at a glance

  • A host of factors including the COVID-19 pandemic and climate change play into fluctuating energy prices and costs.

  • In a new report, WalletHub compiled national data to determine which states spend the most on energy.

  • The report found Wyoming, Alaska, and North Dakota spent the most on energy, while Nebraska, New Mexico, and the District of Columbia spent the least.

Rising temperatures coinciding with inflation and global supply issues means many families may spend more on energy costs this summer. On average, U.S. families spend anywhere from 5 percent to 22 percent of their after-tax incomes on energy costs, while the poorest residents are often at the higher end of that range.

In a new WalletHub report, researchers determined energy costs on a state-by-state basis– totals that vary depending on prices, where individuals reside, and how much energy is consumed.

Wyoming led the country in total energy costs per state, followed by Alaska, North Dakota, Connecticut, and Massachusetts, respectively.

To carry out the report, authors compared total monthly energy bills for each state spent on electricity, natural gas, motor fuel, and home heating oil. Data were collected from the U.S. Census, Energy Information Administration, and Federal Highway Administration, among other agencies. July and August typically see the highest rates of energy consumption throughout the country, researchers said.

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Hawaii ranked first with regard to highest electricity price, with totals costing three times those seen in the cheapest state, Louisiana. Connecticut, Alaska, Rhode Island, and Massachusetts rounded out the top states with the highest electricity price.

However, despite its cheaper price tag, Louisiana residents use the most electricity per consumer, followed by Florida, Alabama, Mississippi and Texas.

Hawaii also ranked first for highest natural gas price, and was among the top five for total motor fuel price.

California residents paid the most for motor fuel while Wyoming residents consumed the most motor fuel per driver.

According to Robert Godby, interim dean of the College of Business and associate professor in the Department of Economics at the University of Wyoming, state-specific fuel taxes, local market conditions, and local emissions requirements all play into higher gasoline costs seen in some states.

“Working from home has contributed to a reduction in transportation costs including fuel costs for many families and therefore reduced demand and prices from what they would be otherwise,” Godby explained to WalletHub.

“It should be noted that the ability to work from home has most often affected higher-income households who are in occupations that allow such arrangements, and therefore can be used to avoid higher fuel costs,” he added, highlighting the impact these rising costs have on low-income households.

Most natural gas consumption per consumer was concentrated in northern states including Illinois, Michigan, New York and Connecticut.

Home heating oil prices were highest in Maryland and Delaware, despite Wyoming and Colorado residents consuming the most home heating oil per consumer.

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