Residential electricity prices in Hawaii in 2016 were more than twice the national average, but residential customers in four states spent even more per household than those in the Aloha state for their electricity, according to an analysis released Feb. 13 by the Energy Information Administration.
The average residential customer in South Carolina spent $1,753 on electricity in 2016, about $400 more than the U.S. average and almost twice as much as the average customer in New Mexico, the lowest-expenditure state.
Residential electricity prices in Hawaii averaged 27.5 cents/kWh in 2016, against a national average price of 12.5 cents/kWh.
It has often been said the best conservation method is high prices. On Tuesday, the EIA published an article that would seem to bolster that argument, at least in part.
While states such as Hawaii, Alaska and Connecticut lead the nation in residential electricity prices, South Carolina, Alabama and Maryland were in the top tier in terms of residential expenditures per customer, due to high electricity usage. Connecticut has the distinction of being third in terms of both electricity prices (20 cents/kWh) and expenditures.
The average residential electricity customer in South Carolina spent $1,753 for electricity in 2016. Annual household expenditures in Alabama, Connecticut and Maryland were $1,747, $1,706 and $1,698, respectively.
“Low electricity prices could be part of the explanation” why residents in the Southeast use more electricity, Owen Comstock, the author of the EIA article, told Utility Dive.
Residential expenditures are a function of electricity prices and electricity used, measured as retail sales. For example, residential customers in both Maryland and Hawaii spent about $1,700 on average for electricity in 2016. So even though Hawaii’s average residential electricity price was almost double Maryland’s (14.2 cents/kWh), customers in Maryland used almost twice the amount of electricity as those in Hawaii, consuming 11,900 kWh per customer in 2016 versus Hawaii’s 6,100 kWh per customer.
In the article, Comstock noted that residential customers in the Southeast use the most electricity on average. Almost all homes in the region have air conditioning and use it intensely. The region, much of which was electrified with relatively cheap electricity from the Tennessee Valley Authority, is also more likely to use electric power for space heating, water heating and cooking than the national average.
South Carolina had the highest average residential electricity expenditures and the sixth highest average electricity usage per customer in 2016. All five states with higher usage per customer than South Carolina were also in the South: Louisiana, Tennessee, Alabama, Mississippi and Texas. Those states are also in the two lowest deciles in terms of residential electricity prices.
The EIA article is a “good illustration of the difference between rates and bills,” Annie Gilleo, senior manager for state policy at the American Council for an Energy-Efficient Economy, told Utility Dive.
“There is a lot of focus on keeping rates low, but it is equally important to keep bills low,” Gilleo said.
A lot of factors go into electricity use, including weather patterns and housing stock — older houses tend not to be very efficient — but utilities can also help by promoting energy efficiency programs, Gilleo said. Energy efficiency can also offset other factors, such as the cost of new nuclear plants, she said.
“It comes as no surprise that Hawaii has the country's highest electricity prices, given its unique geography, but South Carolina's top spot on the expenditures list will leave many people scratching their heads,” Jordan McGillis, policy analyst at the Institute for Energy Research, told Utility Dive.
The reason, he said, is that while South Carolinians consume electricity at a similar rate to that of residents in other states in their region, “the state terribly mismanaged the costly construction and subsequent demise of the V.C. Summer nuclear project. Now South Carolina ratepayers have been left holding the bag.”