Real Estate Blog for Communities across the U.S.

Electricity Prices In Your Region

Electricity rates vary from area to area. Texas electric rates are different than the energy rates in Wisconsin, Maine or Florida. Do you know why the rates where you live are what they are? There are a lot of different factors that go into determining how much you are charged.  Here are some of them.

The Calendar

The reason your electric bills go up in the very hot and very cold months is that you are actively consuming more power. Even if you aren’t running a heater or air conditioner, other things factor in to the cost. For example, in the winter—when there is less natural light during the day—you need to turn on your lights earlier in the day and run them longer. In the summer, even without an A/C unit, you will undoubtedly be running more fans; your refrigerator has to work harder to keep your food cooled, etc.

Geographic Location

How easy is it for power to be run and shared between where you live and other communities? In Hawaii, for example, every island’s electrical system is independent because there is no way to borrow power from the neighboring islands (the distance between them is too great). This means that they need a more complicated infrastructure setup and the cost of maintaining that complex and extensive infrastructure is passed on to consumers.

The same holds true for areas of the continental US that are remote or extremely rural.

Legal Issues

Every state has different laws and regulations for its energy department. In some states, the power industry is highly regulated which can drive the prices up as there is no competition. In other states (like Texas or Ohio) the industry has been deregulated. This has helped lower costs by quite a lot because the utility companies have to compete against each other to keep their customers happy.

Disasters

In areas that have been hit hard (or are likely to be hit hard) by natural disasters, the rates for power are more expensive than in areas with temperate and mostly predictable weather patterns. Tornado alley, coastal areas (particularly those in the south or the tropics where hurricanes are common), states that are routinely hit by blizzards—all of these factors go in to deciding how much to charge people and businesses for energy.

Natural disasters can completely decimate an existing utility structure. This means that the companies need to be prepared to provide power through emergency means and rebuild their structures quickly. Those costs are recouped through consumer pricing.

There are lots of different factors that go into the setting of electric rates. Do not forget, though, that energy rates are changing all of the time. Unlike other utilities (like cable or Internet), there are no contractual rates that you can lock in to make your energy bills predictable.

Take each of these things into account when you’re figuring out where you want to live and how much you want to spend on your energy consumption.

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