Does green electricity cost more than conventional energy?

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By Arthur Murray
For business

Conventional wisdom holds that green energy isn’t more prevalent because it’s too expensive. But the latest information on electricity rates from the U.S. Energy Information Administration points out flaws in that thinking.

Washington, for example, generates nearly 65 percent of its electricity from green sources – which Choose Energy defines as wind, solar, hydroelectric, and geothermal. That places it fourth among states using the most green power. Meanwhile, its residential rate for electricity is 9.35 cents per kilowatt hour, the nation’s fifth lowest rate (and 25 percent lower than the average U.S. rate of 12.47 cents/kWh).

Washington also has the nation’s lowest industrial electricity rate – 4.71 cents/kWh, 29.2 percent lower than the national average – and its 15th lowest commercial rates at 8.71 cents/kWh, 15.7 percent lower than the U.S. mean. The reason is obvious – Washington relies heavily on hydroelectric generation for nearly all its green power, and hydroelectric generation is widely recognized as the cheapest method of generation.

But Oklahoma also uses green sources – they’re responsible more than 37 percent of the state’s power – and has cheap rates – without relying on a heavy dose of hydroelectric generation. Its residential rates of 9.02 cents/kWh are the nation’s second-lowest (Louisiana and Arkansas residents pay 9.01 cents/kWh).

All that said, extensive use of green sources for electricity doesn’t always mean cheap rates, either. Vermont gets about 81 percent of its power from green sources, but it has the nation’s 43rd highest residential electricity rates – 18.06 cents/kWh, about 44.8 percent higher than the U.S. average.

Following are the 10 states that generate the highest percentage of their electricity from green sources, their price/kWh for residential electricity, and where that price ranks among the 50 states:

% of electricity from green sources Residential electricity rate (cents/kWh) Percentage above/below U.S. average
Rank (1 = cheapest)
State
South Dakota 87.4 11.05 17 -11.4
Vermont 81 18.06 43 44.8
Idaho 80.6 9.83 3 -21.2
Washington 64.9 9.35 7 -25
Oregon 57.4 10.68 12 -14.4
Maine 48.5 16.11 41 29.2
Oklahoma 37.4 9.02 6 -27.7
North Dakota 35.8 9.54 5 -23.5
Iowa 35.3 11.08 26 -11.1
Kansas 33.9 11.96 34 -4.1

And, of course, some states that don’t take advantage of green sources have low prices. Louisiana, tied with Arkansas for the nation’s lowest residential electricity rates, generates less than 1 percent of its electricity from green sources.

Following are the 10 states that generate the lowest percentage of their electricity from green sources, their price/kWh for residential electricity, and where that price ranks among the 50 states:

State % of electricity from green sources Residential electricity rate (cents/kWh)
Rank (1 = cheapest) Percentage above/below U.S. average
Mississippi 0.6 11.12 19 -10.8
Delaware 0.9 12.27 33 -1.6
Louisiana 0.9 9.01 1 -27.7
Florida 1.2 11.86 24 -4.9
Connecticut 1.6 20.84 46 67.1
New Jersey 2.1 15.45 39 23.9
Ohio 2.2 12.00 30 -3.8
Rhode Island 2.5 22.51 48 80.5
Virginia 3.3 11.01 20 -11.7
South Carolina 3.5 11.77 29 -5.6

So is there a correlation between green power and rates? Not definitively. Four of the 10 states with the lowest residential rates are among the 10 largest users of green energy. But 2 of those 10 states where green energy is prevalent are among the states with the highest rates.

Among the states that use the least green energy is the one with the lowest rate. But two others rank among the nation’s highest rates, including the highest in the continental U.S.

Arthur directs ChooseEnergy.com’s newsroom, taking advantage of nearly 30 years of newspaper and magazine experience. A native of Virginia, Arthur attended the University of North Carolina at Chapel Hill and graduated with a bachelor’s in journalism.