In this article, we will be finding out whether Birmingham-Hoover, AL has the highest electricity rate in the US. Based on monthly median electricity cost, we’ve prepared a list of 20 Cities With the Highest Electricity Rates in the US, which also includes Birmingham-Hoover.
Navigating the Global Energy Landscape: Challenges and Trends in Electricity Prices and Generation
In recent times, the global power sector has encountered noteworthy obstacles due to the impact of elevated energy costs and economic downturns on demand and affordability. The majority of global areas’ increases in energy consumption in 2022 were restrained by economic downturns and skyrocketing electricity costs, according to the International Energy Agency’s energy Market Report 2023. Due to high energy prices and demand destruction among industrial consumers, the European Union saw a dramatic 3.5% fall in electricity consumption.
The market for electricity generation is predicted to develop at a compound annual growth rate (CAGR) of 8.04%, from an estimated USD 1.8 trillion in 2022 to around USD 3.9 trillion by 2032. Although renewable energy sources like solar are predicted to expand at the highest rate, fossil fuels still hold a dominant 57% market share in the power generation industry.
In the last 20 years, the US electrical market has experienced significant upheaval, marked by the establishment of Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) in specific areas. Since natural gas-fired generating units are frequently the marginal source of power, natural gas prices have a significant impact on wholesale electricity pricing in the US. Due to a lack of competition and constrained capacity, the electrical market has seen periods of persistently high pricing in places like California.
Hawaii is said to have the highest electricity rates in the US at 43.93 cents per kilowatt-hour. And as far as the electricity usage is concerned, Miami is one of the US cities that uses the most electricity as of 2017. The average monthly electricity usage stood at 1,125 kilowatt hours. Also, if you are someone who would want to move to state with cheapest electricity in the USA then Idaho is your option. The electricity rate in Idaho is just 10.35 cents per kilowatt-hour.
The US Energy Information Administration (EIA) estimates that around 35 million homes, or 27% of all households, faced energy insecurity in 2020. This indicates that they either had difficulty paying their energy bills or had to give up other essentials in order to do so.
According to IEA projections, global emissions from the power industry increased by 1.3% year over year to a new all-time high of around 13.2 Gt CO2 in 2022. Asia Pacific is expected to contribute 67% of world emissions from the power sector by 2025, up from 64% in 2022. Due to supply shortages, natural gas prices in the US surpassed $15/MBtu in February 2021, which had a substantial effect on the cost of producing energy.By 2025, the average cost of gas-fired power generation in the US is forecast to reach approximately $150/MWh, including emission charges, whereas the average cost of coal-fired generation is anticipated to be approximately $100/MWh.
In Europe, the cost of gas-fired power generation, including emission costs, is projected to reach around $300/MWh by 2025, while coal-fired generation is expected to be around $200/MWh. In Japan and Korea, the cost of gas-fired power generation is projected to be around $400/MWh by 2025, while coal-fired generation is expected to be around $150/MWh.
Aerial view of transmission and distribution substations providing electricity to residential and commercial customers.
Does Birmingham-Hoover, AL Have the Highest Electricity Rate in the US?
In order to find out the cities with the highest electricity rates in the US, we considered the US Census Bureau’s American Community Survey on electricity rates from 2020. We then listed the cities based on their monthly median electricity costs. Our methodology revealed that Birmingham-Hoover in Alabama has the highest electricity rates in the US. With a typical monthly electricity bill of $200, Birmingham-Hoover is the largest U.S. metropolitan area in this regard. Out of the $290 typical energy bills in the area, electricity accounts for an astounding 69% of the total. The $200 median power bill in Birmingham-Hoover represents more than one-fifth (21.6%) of the $926 median total cost of housing due to the high cost of electricity.
While Birmingham-Hoover does have the highest electricity rates, it doesn’t necessarily have the highest median utility costs.
Several metros outrank Birmingham-Hoover in median utility costs that are below it on our full free list of 20 Cities with the Highest Electricity Rates in the US.
To check the full list, please visit 20 Cities with the Highest Electricity Rates in the US.