The States With the Highest Energy Bills Might Shock You and Make You Move

Turning off the lights and reducing air conditioning use can help lower energy bills, but another way to cut those costs might come down to choosing the right place to live.

Energy bills vary widely from state to state, according to a new study from WalletHub. The survey is based on data compiled on how much Americans spend across the country 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 might surprise you: it’s Wyoming, by far.

In this vast expanse of the West, residents pay an average of $1,591 a month, nearly double the amount paid by residents of North Dakota, which comes in second on the list.

“This stark difference highlights the significant impact that geographic and climate factors have on energy consumption and costs,” said Cassandra Happe, an analyst at WalletHub.

Because of the state’s long, harsh winters and isolated landscape, Wyoming homeowners consume the most heating oil and gas, and pay the most for it. North Dakota and the Iowa plains’ harsh winters also mean sky-high bills.

States with the highest monthly energy costs

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 ill effects of high energy bills.

Electricity is also consumed at very high rates in the hottest parts of the country, with Louisiana leading the way with this type of energy, followed by Alabama and Mississippi.

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

“Despite having the highest prices, the state has the lowest consumption per consumer, suggesting that high costs may be incentivizing residents to adopt more energy-efficient practices,” she said.

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

States with the lowest monthly energy costs

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

Why do energy prices vary so much?

There are several reasons why these costs fluctuate, including energy sources, supply and demand, and the degree of competition at play in the state depending on the regulators, according to Justin Perryman, an assistant professor at the University of Washington School of Law.

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

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

To reduce your energy bills, it’s a no-brainer to use energy-efficient appliances and light bulbs. However, if you’re planning on moving to a new home in the near future, “simply living in one of the least energy-intensive states can outweigh any individual measure you can take to reduce your monthly bills,” Happe says.

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

According to Happe, states with low energy costs can achieve this “through a combination of favorable conditions and strategic initiatives.”