Affordable, reliable and sustainable: report compares utility performance
Detroit residents were among those who experienced frigid temperatures over the holidays. The winter storm dropped temperatures to single digits in much of the country and led to controlled power outages to prevent grid failure. (Photo by Matthew Hatcher/Getty Images)
A nationwide comparison of electric utility performance by an Illinois consumer advocacy group found that customers in states that are heavily reliant on fuel oil and natural gas, as in the Northeast and South, tend to pay more than those with larger amounts of carbon-free generation, among other findings.
The report by the Illinois-based Citizens Utility Board ranked all 50 states and the District of Columbia for utility reliability, affordability and environmental responsibility using 2020 public data from the U.S. Energy Information Administration, the federal Environmental Protection Agency and the U.S. Census Bureau.
Compared to its peers, Indiana ranked near the bottom — at 43 out of 51 — for overall electric utility performance, with its lowest individual scores in the environmental responsibility sector. In terms of affordability and reliability, the Hoosier state was closer to the middle — at 36 and 27, respectively.
The average residential electric bill is below the national average, with Hoosiers paying $120 each month compared to $125. However, the average annual electricity cost as a percentage of median income is higher in Indiana than the national average. Hoosiers spend roughly 2.18% of their income on electricity, above the national average of 2.09%.
Indiana ranked 48th in environmental responsibility, with high emissions from the electric sector in terms of carbon dioxide, sulfur dioxide and nitrogen oxide. Compared to other states, Indiana lags when it comes to generating clean energy, ranking at 40 out of 51.
For overall performance across those categories, the top 10 were, starting with the highest ranked, Washington, Nevada, the District of Columbia, South Dakota, Illinois, Colorado, Arizona, Minnesota, Oregon and Nebraska. The bottom 10, starting with the lowest ranked, were West Virginia, Alaska, Mississippi, Massachusetts, Louisiana, Michigan, Alabama, Georgia, Indiana and Connecticut.
It’s the second year in a row the group has compiled the report, which started as a way to measure how Illinois compared to other states and morphed into a project it hopes will be useful for utility regulators, electric ratepayers and state policymakers across the country, said David Kolata, the board’s executive director.
“What we’ve tried to do here is provide as full a picture as we possibly can,” he said. “We view this as a conversation starter not a conversation ender. We do think it provides a convenient and accessible way to get at this data. … Our hope is every state will improve in these categories.”
Given the wide state-by-state variance in regulatory regimes, the difference in rates between customer classes and how their bills are put together, it can be difficult to compare electric prices across state lines. Also, climate and heating and cooling differences can make apples-to-apples bill comparisons tough. Electric customers in the South, for example, tend to rely on electricity for heating in the winter and face hotter summers that require more air conditioning than in the North, where gas is more common for home heating.
“Whereas households in warmer climates may consume more electricity on an annual basis to run air conditioning units than households in colder climates, those same households will not spend as much on natural gas, propane or other heating fuels during the winter,” the report says. Other states, like Alaska and Hawaii, are expensive by virtue of their geographic isolation from the larger U.S. electric grid.
The top 10 for overall affordability — as measured by average household energy expenditures, total household electric costs as a percentage of income, electric cost per kilowatt hour, total cost electricity expenditures and cost of energy efficiency savings — were Utah, Washington, Idaho, the District of Columbia, Colorado, Wyoming, Montana, Oregon, Nebraska and Illinois. The bottom 10 states were Connecticut, Hawaii, Massachusetts, Alaska, Rhode Island, New Hampshire, Vermont, Alabama, Georgia and South Carolina.
Though the study used 2020 numbers, those affordability problems in states that rely on gas will likely have gotten worse, Kolata said, given the huge spike in gas prices triggered in part by Russia’s war in Ukraine.
In November, the National Energy Assistance Directors’ Association said more than 20 million American families (roughly 1 in 6) are behind on utility bills and in total owed more than $16 billion as of August, up from $8.1 billion at the end of 2019, a problem expected to exacerbated by natural gas prices hitting a 16-year high. Power plants that burn natural gas provide about 38% of U.S. electricity generation.
“There’s every reason to believe that those states that are dependent on natural gas and fossil fuel are going to do even worse on affordability going forward,” Kolata said. He noted that the study found that states with significant amounts of “firm” carbon free generation, such as Washington and Oregon’s huge hydroelectric resources, and Illinois, which has more nuclear reactors than any other state, generally fare well on affordability measures.
Though outages caused by power plants tripping offline, as in Winter Storm Elliott, get a lot of headlines, only about 1% of outage minutes nationally are caused by generation or transmission problems. Much more common are outages that hit the delivery system, such as storms downing power lines, equipment failures and other problems, the report says.
Using three reliability performance indices created by the electric power industry, the report ranked states based on how well utilities performed during “major events” such as ice storms, hurricanes and wildfires, as well as under normal circumstances.
The top 10 for reliability were Arizona, Nevada, the District of Columbia, South Dakota, Nebraska, North Dakota, Maryland, Kansas, Minnesota and Florida. The bottom 10 were Louisiana, West Virginia, Maine, Mississippi, Oklahoma, Arkansas, Alabama, Alaska, MIchigan and Tennessee.
For 2020, Hurricane-prone Louisiana had far and away the longest average duration of power outages due to major events, at 3,624 minutes per customer, while Arizona, the best state, only averaged 72 minutes. In the U.S., 2020 set a record for the number of named storms (11) that made landfall, per the Weather Channel. Three hurricanes hit Louisiana that year.
Without major events, Nevada was the top state (behind only the District of Columbia) with an average outage duration of 55 minutes per customer. The worst was West Virginia at 468 minutes.
The report also ranked states by their sources of electricity and emissions data, giving consumers, policymakers and others a “bird’s-eye view of each state’s renewable, clean energy and fossil fuel mix” as well as data on how aggressively utilities are deploying energy efficiency programs.
The overall environmental ranking includes a combination of carbon and other emissions, renewable electricity (including biomass) generation, clean energy (defined as all renewables, plus nuclear and excluding biomass) and residential energy efficiency program savings as a percentage of residential electric sales. The top 10 were Washington, South Dakota, Oregon, New York, Vermont, New Hampshire, California, Idaho, Maine and Oklahoma. The bottom 10 were West Virginia, Kentucky, Indiana, Louisiana, Ohio, Missouri, Mississippi, Wyoming, Utah and Alaska. There were some interesting contradictions.
For example, Texas led in both clean electricity generation and CO2 emissions.
“Texas is big everywhere,” Kolata said, adding that he hopes the report will be a tool for politicians, utility regulators, customers and others to begin exploring the difference in performance between states.
“You can’t improve what you can’t measure.”
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