The States With the Highest—and Lowest—Energy Bills Might Shock You Into Moving

Photo-illustration by Realtor.com; Source: Getty Images (2)

Turning off the lights and easing up on the air conditioner might help curb energy bills, but another way to trim those costs might boil down to choosing the right place to live.

Energy bills vary greatly by state, according to a new survey from WalletHub. The survey is based on data tabulated on how much Americans across the nation spend on a variety of energy sources, including electricity, natural gas, home heating oil, and the fuel people use to drive their cars.

And the state with the highest energy costs of all might surprise you: It’s Wyoming—by a mile.

In this large Western expanse, residents have to pony up an average of $1,591 a month, almost twice the amount residents pay in North Dakota, which comes in at No. 2 on the list.

“This stark difference highlights how geographical and climatic factors significantly impact energy consumption and costs,” says Cassandra Happe, a WalletHub analyst.

Due to the state’s long, harsh winters and remote landscape, Wyoming homeowners use the most heating oil and gas—and pay more for it, too. Frigid winters in North Dakota and the plains of Iowa also mean sky-high bills.

States with the highest monthly energy costs

Residents of Wyoming have to pony up an average of $1,591 a month on energy bills.

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  1. Wyoming: $1,591
  2. North Dakota: $840
  3. Iowa: $798
  4. Montana: $787
  5. Minnesota: $782

But you don’t have to live in a cold climate to feel the sting of high energy bills.

Electricity is also consumed at very high rates in warmer parts of the country, with Louisiana taking the top spot with this type of energy, followed by Alabama and Mississippi.

But what’s surprising, notes Happe, is Hawaii’s relationship to electricity.

“Despite having the highest prices, the state boasts the lowest consumption per consumer, which suggests that high costs may incentivize residents to adopt more energy-efficient practices,” she says.

The state with the lowest energy cost is New Mexico, where residents pay a mere $376 per year. Many of the low-energy states on this list have milder winters, of course, but others have wisely invested in efficiency and renewable sources, such as “wind and solar power, which provide more affordable energy options,” says Happe.

States with the lowest monthly energy costs

Residents of New Mexico pay a mere $376 per year on energy costs.

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  1. New Mexico: $376
  2. Arizona: $400
  3. Kansas: $436
  4. Texas: $437
  5. Nebraska: $453

Why do energy prices vary so much?

According to Justin Perryman, adjunct professor at Washington University School of Law, there are several reasons why these costs fluctuate, including energy sources, supply and demand, and how much competition is at play in the state based on regulatory authorities.

“States like Texas have a deregulated electricity market, so in this place and others like it, there are typically more energy providers, which often leads to more competition and lower prices,” Happe says.

But in states with a regulated energy market, like Missouri and 17 others, “the state energy authority sets the prices,” he continues.

To save money on energy bills, energy-efficient appliances and lightbulbs are no-brainer ideas that can help. However, if you’re planning a home switch in the near future, “simply living in one of the least energy-expensive states may outweigh any individual measures when it comes to cutting down monthly bills,” Happe explains.

Perryman urges residents who live in deregulated markets to “shop around for lower electricity costs” and to sign up for “incentives and assistance to upgrade the energy efficiency of your home, including energy audits, insulation, newer windows, and more efficient appliances.”

States with low energy costs are able to achieve this, reports Happe, “through a combination of favorable conditions and strategic initiatives.”

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