As utilities across the country strive to reduce load and streamline efficiency, customers continue to spend on energy. Production capabilities play a big role in the states that spend the most on electricity, but every state has unique circumstances to deal with.
For example, Alaska has the highest energy expenditures per capita due to its large size, small population, high costs, cold weather and a lack of infrastructure. On the other end of the spectrum, the industrial sector in Texas, led by energy-intensive petroleum refineries in the Permian Basin, constitutes 49.2% of the state's total energy consumption.
Below, we listed the ten states with the highest energy expenditures per capita. After reviewing the data in the Energy Information Administration's total state energy rankings, Utility Dive picked apart where the money is coming from and why:
1. ALASKA: $8,807
Why so high: Alaska is sparsely populated and vast in size, meaning that most Alaskans do not receive energy through an interconnected grid while many rural consumers are dependent on diesel-electric generators. Alaska has a profusion of renewable energy sources but ranks last in renewable energy production because of a lack of investment in transmission grids to transport it. The nearly constant cold means residents use a lot of energy on heating their home. All of this inevitably leads to Alaska's electricity prices being among the highest in the country, which, in turn, leads to highest expenditures per capita on energy in the country.
2. LOUISIANA: $8,662
Why so high: Despite the state's abundance of crude oil and natural gas deposits, the presence of oil refineries in the Outer Continental Shelf in the Gulf of Mexico and chemical manufacturing plants results in considerable consumption. Two nuclear power stations alone account for one-fifth of the state's energy consumption. Coupled with the almost exclusive use of electricity to heat homes, high demand for air conditioning every summer and a volatile mix of tropical storms and hurricanes that destroy significant portions of the state's grid, leading to massive and expensive rebuilding projects, and you have Louisiana, the state with the second highest energy expenditures per capita.
3. WYOMING: $7,904
Why so high: While electricity demand is low, leading to some of the most affordable prices in the U.S., and total consumption is low due to Wyoming having the smallest population in the country, energy expenditure per capita remains among the highest in the nation due to its mining, oil and gas industries. The Pinedale and Jonah fields are two of the ten largest natural gas reserves in the country. Two-fifths of all coal produced in the U.S. is mined in Wyoming, most of it in the Powder River Basin. While this leads to the lowest coal prices in the country, the harvesting, processing and distribution of fossil fuels constitutes the most significant portion of Wyoming's energy consumption.
4. NORTH DAKOTA: $6,740
Why so high: Similar to Wyoming and many of the states on this list, North Dakota's small and spread-out population explains the low total energy consumption and high energy expenditure per capita. While energy costs are low, the long, cold winters result in a significant amount of residential heating while the state's industries, in particular the fossil fuel extraction industry in the Williston Basin and coal production industry in central North Dakota, account for approximately half of the state's total energy consumption.
5. TEXAS: $5,446
Why so high: The sweltering climate and expansive energy-intensive industries in Texas results in a high energy expenditure per capita. Once you take population into account, Texas has the highest total energy consumption in the country, constituting approximately one-tenth of our total energy consumption. The industrial sector is responsible for half of the state's consumption, in particular due to the aluminum, chemical, forest product, glass and petroleum refining industries. Its crude oil reserves, the largest of which are located in the Permian Basin of West Texas, make up nearly one-fourth of the nation's total while its natural gas reserves, the largest of which are located in the East Texas Basin, account for over three-tenths of the nation's total. Widespread air conditioning and the use of electricity to heat homes in the winter, along with the isolation of certain areas from the grid, all contribute to Texas's place on this list.
6. IOWA: $4,841
Why so high: While energy costs in the state remain low, Iowa's small population and industrial sector cause it to have the sixth-highest energy expenditure per capita. Energy-intensive industries in Iowa account for nearly half of the state's consumption. Widespread commercial and residential dependence on liquefied petroleum gas, which has a low energy density compared to petroleum and fuel oil, plays an important role in Iowa's energy consumption.
7. MAINE: $4,746
Why so high: Maine has a small and spread-out population, leading to higher energy expenditure per capita. The state's energy-intensive forestry industry has resulted in industry being the largest energy consuming sector, the only state in New England where this is the case. Other contributing factors including the high price of electricity and the signification energy consumption caused by transportation.
8. SOUTH DAKOTA: $4,651
Why so high: South Dakota is sixth in the country in transportation consumption per capita and seventh in commercial consumption per capita while its energy-intensive industries still make up the most significant portion of energy consumption in the state. The long, cold winters and the spread-out and small population, coupled with the need for the grid to distribute energy to secluded areas, contribute to South Dakota's status as the eight-highest ranked state in terms of energy expenditure per capita. On the plus side, energy costs in the state are among the lowest in the nation.
9. MONTANA: $4,610
Why so high: Similar to North and South Dakota, Montana is another state with a small but scattered population, leading to a low total energy consumption but a high energy expenditure per capita. Its energy-intensive industries, in particular the coal mines in the Powder River Basin and the crude oil refineries in the Williston Basin, along with the transportation sector's consumption account for the majority of the state's energy consumption. However, residents of Montana benefit from some of the lowest electricity prices in the nation.
10. KENTUCKY: $4,526
Why so high: Kentucky is one of those rare states that produces more energy than it consumes. The energy production industry consumes an enormous amount of energy itself, resulting in Kentucky, which has nearly one-third of all the coal mines in the country, being the fifth-highest total energy consuming state. The most significant coal deposits are located in the eastern Central Appalachian Basin and the western Illinois Basin. Once you add energy consumption from the state's oil refineries and its energy-intensive aluminum industry, the industrial sector constitutes 42% of the Kentucky's total energy consumption. Once again, low energy costs are a perquisite for residents of the Bluegrass State.
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