Energy costs are low but electric bills aren't

The National Association of Homebuilders recently studied the consumer costs of owning a home. The biggest, far and away, was paying the monthly electric bill.

In every state electric utilities are regulated, but even so the rates consumers pay to keep the lights on and, in some cases heat and cool their homes, has been going up. Because different states have different ways of regulating utilities, the average monthly electric bill can vary widely, depending on where you live.

Outside of Alaska and Hawaii, the states with the highest average monthly bill are located in the west south central U.S. and include Arkansas, Louisiana, Oklahoma, and Texas. The average monthly electric bill in that region was $126.75 in 2013, according to the Energy Information Administration (EIA).

In the Pacific region, made up of California, Oregon, and Washington, the average bill is the lowest in the U.S. – $90.84. The state with the highest average monthly electric bill was Hawaii at $190.36 or nearly 2.5 times the average electric bill in New Mexico, which was the lowest in 2013 at $76.56.

Not all energy is getting cheaper

It may seem counter-intuitive for consumers, but at a time when they are paying sharply reduced prices for gasoline to power their cars and trucks, they are paying more to their utility for electricity. In fact, the EIA stats show residential consumers are paying more for electricity that businesses.

The average retail price paid by residential consumers in 2013 was 12.13 cents/kWh. The average retail price paid by commercial consumers was 10.31 cents/kWh while industrial consumers paid 6.88 cents/kWh.

While an overabundance of oil is mostly responsible for driving down the price of gasoline at the pump, electricity “supplies” are not increasing nearly as fast.

As we reported last week, U.S. utilities are projected to add 20 gigawatts (GW) of generating capacity to the power grid this year but are expected to remove 16 GW of capacity – mostly coal generating plants. That leaves a net gain of only 4 GW.

Much of the new capacity is being generated through alternative energy sources, most notably wind. But EIA points out not all power sources deliver the same bang for the buck.

“Because different types of generating capacity have very different utilization rates, with nuclear plants and natural gas combined-cycle generators having utilization factors three to five times those of wind and solar generators, capacity measures alone do not directly show how much generation is actually provided by new capacity of each type,” EIA said in a report.

What to do

For consumers who have endured a bitterly cold winter and look forward to higher air conditioning bills in the months ahead, conservation measures are the best way to keep electric bills in check.

If you have an electric water heater, lower the temperature. Most homes heat water at higher than necessary temperatures, requiring additional electricity to maintain that level.

The Environmental Protection Agency (EPA) estimates a water heater set at 140 degrees or hotter can waste more than $60 in energy costs were year.

Change your HVAC air filter on a regular basis. If possible, replace the disposable filter with a reusable one. When filters fill up with dirt and lint it increases the work load on the air handler, using more electricity.

If your appliances are old, consider an update. New appliances are much more energy efficient. If you are going to eventually have to replace them, doing it sooner rather than later will start saving on your monthly electric bill.

A programmable thermostat can quickly pay for itself. By raising the home’s temperature during the hours no one is home and then restoring the comfort level just before the family is scheduled to return, a programmable thermostat can dramatically trim electricity costs.

Energy costs are low but electric bills aren"t