The financial resources website WalletHub has found significant disparities when it comes to monthly energy costs from state-to-state in a ranking that shows lower electricity or natural gas prices don't necessarily mean lower costs for consumers.
The ranking is aimed at helping consumers budget for utilities, as WalletHub said about 7.3% of the average consumer's annual income goes toward energy costs. The website compared data from total monthly energy bills in each of the 50 states and the District of Columbia, constructing its ranking by examining the consumption rates and prices of electricity, natural gas, motor fuel and home heating oil.
WalletHub found that the top ten cheapest energy states from first to last are Washington DC, Colorado, Washington, Oregon, Arizona, New Mexico, Illinois, Florida, California and Louisiana. While the lowest monthly energy costs in the nation of $223 were found in the District of Columbia, the 10 states had average monthly energy costs of $263.
That's compared to the bottom ten that had average monthly energy costs of $383. WalletHub found that Connecticut has the highest monthly energy costs at $410.
In its analysis of monthly natural gas costs, WalletHub found that states in the Northeast and Southeast, where supply is limited and consumption is lower than in other parts of the country, paid the lowest price. Overall, WalletHub suggested that lower prices don't equal lower costs, finding that "consumption is a key determinant in the total amount of an energy bill."
For example, in southern Louisiana, which has cheap electricity, hotter temperatures force households to turn up air conditioners along with their electric bills, compared to Northern California, where electricity is more expensive but the temperate climate keeps cooling units idle and helps lower electricity prices.
Similarly, WalletHub found that Florida pays the least each month for natural gas at $3, followed by Maine, where fewer households and power plants have converted to natural gas compared to other parts of the country. Consumers there pay about $4 per month for gas, according to WalletHub. Those off the grid in Hawaii pay the third cheapest amount for natural gas in the nation at $5 monthly, while the fourth and fifth cheapest states are New Hampshire and South Carolina, where households pay about $17 per month for natural gas.
Michigan and Illinois, WalletHub said, pay the most for natural gas each month at $66 and $50, respectively.