Get ready to crank up air conditioners — and utility budgets. July tends to be the hottest month. So if you’re trying to beat the heat, this month’s higher-than-usual power bill could burn a hole through your wallet.
In the U.S., energy costs eat between 5 and 22 percent of families’ total after-tax income, with the poorest Americans, or 25 million households, paying the highest of that range. Lower energy prices don’t necessarily equate to savings. Where residents live and how much energy residents use are a big part of the equation.
To better understand the impact of energy on finances relative to location and consumption habits, WalletHub compared the total monthly energy bills in each of the 50 states and the District of Columbia. The analysis uses a formula that accounts for the following residential energy types: electricity, natural gas, motor fuel and home heating oil.
According to the U.S. Energy Information Administration, the highest energy consumption of the year is recorded in July, followed by August. That leads to higher energy costs during this period.
For advice on reducing our dependence on traditional energy sources and cutting costs, a panel of energy and policy experts shared their thoughts on the following key questions:
• What are some good tips for saving money on energy bills?
• What makes energy costs higher in some states than in others?
• Are tax deductions and credits effective at incentivizing households to be more energy efficient?
• Do you believe the government should continue to provide energy assistance to low-income households? If so, what’s the best way?
• Have recent regulatory changes made by the Trump administration begun to bring coal back?
To determine the most and least energy-expensive states, WalletHub compared the average monthly energy bills in each of the 50 states and the District of Columbia using the following equation: (Average Monthly Consumption of Electricity * Average Retail Price of Electricity) + (Average Monthly Consumption of Natural Gas * Average Residential Price of Natural Gas) + (Average Monthly Consumption of Home Heating Oil * Average Residential Price of Home Heating Oil) + (Average Motor-Fuel Price * (Miles Traveled/Average Motor-Fuel Consumption/Number of Drivers in the State)) = Average Monthly Energy Bill in the State.