EIA Finds Monthly Electricity Rates Lower Across Most of the United States
The majority of states (38 to be exact) reported a decrease in electricity bills for 2019 (the last year for which data is available). Kansas bills dropped a whopping 9.2%, with New York, Missouri, and Ohio exceeding a 5% reduction.
Many factors contribute to utility costs for homeowners. Consequently, those variables cause electric bills to fluctuate year to year. The United States Energy Information Administration (EIA) gathers data on U.S. energy use and prices and then analyzes those statistics each year to inform policy and the public. Their findings apply not only to those who love a detailed bar graph — anyone who has had a surprising utility bill can appreciate a comprehensive understanding of what influences the cost for power and what costs land on the individual consumer’s wallet.
Interestingly, the EIA reports that residential electric bills decreased in 2019. Electric costs last year dipped almost 2% lower than in 2018 — about $2 saved each month, from an average of a monthly bill of $117 to $115. Notably, this decrease results from consumer behavior, not an overwhelming reduction in the cost of electricity. The utility increased in price from 12.87 cents per kWh in 2018 to 13.01 cents per kWh in 2019. The EIA concludes that Americans have been using less electricity.
So what may have influenced consumer behavior? Consider the weather as a significant variable. Cooling degree days (days when air conditioning required) decreased by nearly 6%. Heating degree days increased, but only by 0.6%. Heating and cooling represent the most energy-hungry systems in the home, so relying on them for fewer days can dramatically affect average electricity consumption.
Appliances represent another major contributor to electricity in the home. However, long-term purchasing trends show the American consumer buys more energy-efficient household appliances, such as dishwashers, refrigerators, and washing machines. This pattern does not remain specific to 2019 but does explain last year’s lower electricity consumption. These “greener” devices report energy savings between 10% to 50% compared to similar models — and those savings optimize when replacing older appliances. Other purchases, such as LED bulbs, power strips, and smart thermostats, have also grown in popularity among consumers.
Comparing state to state gets a little tricky since one must consider the cost of fuel used to generate electricity. Certain regions around the country experience shifting prices due to the fuel type used to power their homes. New England, for example, depends on natural gas. New England — not near natural gas storage locations — relies on a pipeline. Hawaii depends on oil transported thousands of miles to its shores in the Pacific. Texas produces the most abundant crude oil, natural gas, and wind energy in the U.S. The type and access to fuel can heavily influence a region’s electric rates. And beyond the fuel itself, states and private utility companies may also add fees and taxes.
Overall, Americans have become more energy-savvy as they employ plenty of DIY tricks to reduce energy use at home. As 2020 comes to a close — luckily, it seems as if electricity trends may stay about the same. Americans can hopefully breathe a sigh of relief when holiday energy bills arrive.