New report shows that while total energy bills across Alabama are high, the rates we pay for that energy are very low.

A recent report published by Tennessee Real Estate specialists, TNRealEstate.com, suggests that citizens in Alabama have the third highest energy bills in the country out of 50 states. Their data was collected by TECO Energy in Tampa, Florida and released by Statista in January 2023.

For their ranking system, they added together the average monthly costs of both electricity and natural gas to get the total average a resident in each state pays for energy each month.

In this report Alabama does rank third at $222.78 per month after Hawaii ($399.49) and Connecticut ($242.49.) Georgia and Arizona rounded out the top five. The Alabama average for the electricity portion ranked third as well while our natural gas average was ranked sixth. However, it is important to view these rankings in proper context.

While Alabama might pay a higher amount on average for their energy bills, do we actually pay more for the energy we use?

That answer is a resounding no.

In order to gain a better understanding of why Alabama ranks so high on this list, HBJ sat down with Huntsville Utilities Community Relations Director Joe Gehrdes.

During the interview, Gehrdes pointed out that while the average energy bill might be more costly than other states, the rate that we pay for energy across the southeast, and especially in the TVA regions, are much lower than the rates paid by other states. He attributed the high average partly to the fact that Alabama residents use much more energy than other states with milder weather patterns.

“Our cooling season in the southeastern United States is the longest period,” Gehrdes explained. “And so what you’re referring to there is a thing called energy burden. The rate of energy across the southeast, but especially in the TVA area, is very low. Our customers pay for the lowest rates in the country, but they use more. So it’s that long cooling season is mostly at play.”

His claims are backed up the annual utility bill comparisons provided by energy company Memphis Water Gas and Light. Of the 40 cities compared in their report, Huntsville paid the 12th cheapest rates when factoring electricity, natural gas and water. Huntsville paid the 13th cheapest rate for electricity alone and 20th out of 40 for natural gas rates.

While the weather and demand for energy is the biggest factor driving up the average monthly bill, Gehrdes also pointed out other factors which included the methods used to heat homes during cold snaps and existing home infrastructure.

“Many, many people around the southeast, and particularly in Alabama, have heat pumps, and that’s electric heat as opposed to natural gas. Heat pumps are wonderful and very efficient under certain conditions,” he continued. “But when they switch to heat in the winter months and the temperature gets below freezing for an extended period of time, they don’t work well. So they switch to what your system will call auxiliary or emergency heat. That is electric resistant heat. Think of it as a hair dryer or a space heater in your HVAC, and it uses from three to seven times more energy than your heat pump would use if it were operating efficiently. That’s a huge cost to the consumer. And because it’s weather driven, it’s unavoidable. So this past winter, we did have some of that. We’ve had a cooler, consistently cooler winter season than we normally do.”

Another factor pointed out by Gehrdes and supported by the Department of Energy is low income burdens which have citizens living in very inefficient housing situations. While weather, home age, and home size can certainly have an impact on energy consumption, low-income households in the southeast generally consume more energy and more electricity than most other regions, even when controlling for these factors due to inefficiency. D1AA3918 C1A0 4565 8883 02871383AA64

One way to address high energy burdens is by implementing cost-effective energy efficiency measures to help reduce consumption of electricity and other fuels. Efficiency is a low-cost resource across the country and can reduce household energy costs regardless of climate, heating fuel, or energy price factors in a state.

The map provide by the Department of Energy presents analysis from a new study which found cost-effective efficiency improvements, such as insulation and more efficient lighting and appliances, in low-income households can reduce electricity consumption by 13% to 31%. These measures reduce a household’s energy costs, and lower energy bills as a result.

Gehrdes explained that there are programs within Huntsville and Madison County to help increase efficiency with energy consumption.

“We have the most successful energy efficient new homes construction program. Which gets about 90% of all the new single family homes built in Madison County go through our program. And that’s energy code compliant, very efficient residential construction. We also have some programs that are aimed at our low income / income constrained customers where if they qualify, they get some improvements for free. And that’s funded in part through our project share program and TVA’s home uplift program. So we’re sensitive to high bills.”