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A study finds that Wyoming tops the rankings for the country’s highest energy costs

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A recent analysis by the personal finance website WalletHub found that Wyoming tops the national rankings for the highest energy costs. The site used a formula that accounts for electricity, natural gas, motor fuel, and heating oil costs for consumers. They found the average monthly energy bill amounted to $738 dollars a month.

“What they basically do is they take the average cost of each kind of electricity as measured by one of the government agencies, the Energy Information Agency, and they multiply that by the average monthly consumption of a household,” said University of Wyoming energy expert Rob Godby, who was included in Wallet Hub’s analysis. “They multiplied just the average household use, or, in this case, distance traveled. Then they just estimate what the average costs for each of those might be.”

The state has a wide discrepancy when it comes to fuel costs versus electricity costs, which rank very low and high. The state is a major producer of energy, especially with regard to coal production. But that doesn’t necessarily translate to lower energy prices. Lower income households are also disproportionately impacted. This is due to lower-income jobs often having fewer opportunities for remote work, which can reduce transportation and fuel costs.

“You also have to think about how people use energy and in rural states like Wyoming where you have to drive further and it’s more likely you have a larger vehicle that consumes more gasoline, you’re going to have higher gasoline costs,” he explained. But where price matters more is in electricity markets. Our electricity costs on average, are among the lowest in the country, we ranked 41st. And that's just because while we you do use electricity, our electricity use is more comparable to other places in the country, we tend to have less air conditioning, which offsets the greater heating we might use electricity for.”

Fuel prices, which have risen to their highest level in years, have been a topic of concern for so many across the country. And while they’ve begun to decline nationwide, Godby noted that they still remain high.

“We often have higher gasoline prices than the national average, say during the tourist season. and one reason for that is just demand,” he said. “The other reason for that is because we're rural, we have less competition. Prices don't tend to come down as quickly in our region as they do elsewhere. Wyoming has kind of an average price for gasoline relative to the country. But if you look at our rank in terms of fuel costs, in the country, we’re actually the highest. And the reason for that is because we're so rural, typically, households in Wyoming, thrive a lot more than the average family. We're more likely to have vehicles that consume more fuel than the average family.”

The state’s small population is also responsible for the high cost of heating oil. Even though it’s not the major way in how Wyomingites heat their homes, factors like population play into the price in a similar way to gas prices.

“It's actually third on the list after natural gas and electricity,” Godby explained. “It's a relatively smaller portion of households, but of those households that do use heating oil, we have the highest expenses, and that's, again, a combination of two factors. One is home heating oil markets in Wyoming are not as competitive as they are elsewhere. It's more costly to get those deliveries and so prices are a little bit higher. And secondly, we have pretty cold winters, and they last a long time.”

Due to the nature and length of winter, households may have to begin using regular heat in October and may not be able to turn it off until the spring months, which can extend well into May or even June, he added.

“If you look at natural gas, our natural gas prices are actually relatively low in the country,” he said. “But of course, because of our longer winters and colder winters, we typically use more natural gas. And so even though our prices are often lower than natural gas prices across a lot of the country where they use it for heating, both home heating and water heating, we still use more of it. “We rank about middle of the pack, about 27th by their [WalletHub’s] estimate.”

“Our electricity cost is much lower than most other states and that's because we're an energy producer, we have cheap sources of energy, whether it's renewables or coal,” Godby said. “Both of those are very low cost in the state, so electricity costs are among the lowest in the country. It's a mixed bag. You total those four areas up electricity, natural gas, fuel for vehicles, and home heating oil for those households that use it. And you add up the total cost across those four areas, it turns out that Wyoming is actually the highest in the country.”

Switching to more fuel efficient vehicles, appliances, and greener sources of energy, such as installing solar panels, can make a difference in both the short term and the long term. Having low energy prices, from fossil fuels or otherwise, doesn’t necessarily encourage switching away from what’s worked for so many for so long.

“One of the things about Wyoming is we've been used to low energy prices," he said. When we have low energy prices, we use more energy. Of course, the flip side of that is when those prices go up, it's very difficult for people in Wyoming to substitute away from that energy use. But the truth is, in Wyoming, we use a lot of energy per person or per household relative to the average household in the country. And because we use more energy, our energy costs are just higher, relatively speaking, compared to other average households and other states.”

Hugh Cook is Wyoming Public Radio's Northeast Reporter, based in Gillette. A fourth-generation Northeast Wyoming native, Hugh joined Wyoming Public Media in October 2021 after studying and working abroad and in Washington, D.C. for the late Senator Mike Enzi.
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