New England continuously sees the highest average residential electricity rates in the continental US. In 2012, the average residential electricity rate was 15.89 cents per kilowatt hour (kWh), well above the national average of 11.62 cents/kWh (the noncontiguous region of Alaska and Hawaii had an average rate of 26.63 cents/kWh).
2012 Average Electricity Rates by State: New England
- Connecticut – 17.08 cents/kWh
- Maine – 14.69 cents/kWh
- Massachusetts – 15.23 cents/kWh
- New Hampshire – 15.90 cents/kWh
- Rhode Island – 15.71 cents/kWh
- Vermont – 17.82 cents/kWh
It is understandable that Alaska and Hawaii have high electric rates because of their location outside of the continental US, but why does New England consistently see such high rates?
Lack of Energy-Producing Natural Resources
New England has very little energy-producing natural resources (coal, natural gas) compared to the rest of the US. While some renewable energy has gained traction in the region, namely from hydropower and wind power, renewable energy generation must increase significantly to make any kind of impact on lowering electric rates in the region.
Deregulation in the region is also partly responsible, but only to a small extent. Prior to 2000, utility companies were able to generate their own electricity to sell to their customers. Deregulation broke down the electricity market, forcing utilities to sell off any generation assets to make way for competition in the market. Utilities now but power in wholesale from generation companies (mostly outside of New England), and resell to their customers at no profit. As the competitive market matures, rates are expected to decrease.
Compare & Switch To Save
New Englanders in deregulated states can shop around for lower electric supply rates by comparing various retail electricity providers and their rates and plans. By default, customers pay for supply from their utility, which often has higher rates than many retail electricity providers offer. Here at ElectricityRates.com, we make the shopping process simple. Simply scroll to the top of this page, enter your ZIP Code in the box, select your utility, and you can then view a list of some of the best providers that service your area. You can learn more about comparing providers and their plans here.
Only a small percentage of New Englanders have opted to participate in electric choice for the supply side of their electricity service. As more customers shop around, competition among providers increases, which lowers average electric rates since each provider is competing for your business.