How does Texas energy stack up against neighbors?

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By Arthur Murray
For business
Texas energy prices often top those of its neighboring states.

Texas electricity prices have been on the increase since a late-summer heatwave, but what about the rest of the Texas energy story? How does the Lone Star State stack up against neighboring Arkansas, Louisiana, Oklahoma, and New Mexico?

The answer differs depending on which pieces of the Texas energy puzzle you’re studying. In general, Texas compares well with its neighbors, and in most cases, it ranks below national averages for the energy sector.

Electricity is a mixed bag for Texas customers

According to the most recent data from the U.S. Energy Information Administration, Texas ranks 25th in the nation when it comes to residential electricity rates – 12.21 cents per kilowatt hour (kWh). That’s about 6.4 percent below the national average.

But that price is above the average rates for its neighbors – well above with one exception. Following is a chart showing Texas rates over the most recent three months, as well as those of the state’s neighbors and the national average:

Residential electricity price (kWh) September October November
Arkansas 10.05 9.71 9.65
Louisiana 9.68 9.89 9.47
Oklahoma 10.64 10.98 9.76
Texas 11.85 11.97 12.21
New Mexico 12.95 13.06 12.18
U.S. 13.17 12.84 13.04

And then there are monthly residential electricity bills. Remember, rates aren’t the only thing that determines bills – usage plays a huge factor as well. That usage turns Texas bills Texas-sized. They’re the highest in the region – about 15 percent higher than the national average.

Residential electricity November rate Avg. monthly usage (kWh) Avg. bill
Arkansas 9.67 1,028 99.41
Louisiana 9.36 1,187 111.10
New Mexico 12.27 615 75.46
Oklahoma 9.99 1,039 103.80
Texas 11.6 1,112 128.99
U.S. 12.9 867 111.84

When it comes to commercial electricity, Texans enjoy the sixth-lowest rates in the nation – 8.19 cents/kWh. And while that price is nearly 23 percent lower than the national average, one of Texas’ neighbors has a lower one:

Commercial electricity rate (kWh) September October November
Arkansas 8.57 8.58 8.59
Louisiana 8.59 8.72 8.93
Oklahoma 8.28 7.73 7.48
Texas 8.46 8.15 8.19
New Mexico 9.78 9.96 9.89
U.S. 10.97 10.74 10.57

For the record, that Oklahoma rate is the nation’s second-lowest commercial rate – behind only Idaho.

Most neighbors also are beating Texas when it comes to industrial electricity rates – even though the Lone Star State’s rates are more than 16 percent lower than the national average. Check out which neighbor fares best:

Industrial electricity rate (kWh) September October November
Arkansas 6.25 5.75 5.73
Louisiana 4.82 5.41 5.07
Oklahoma 5.11 4.46 4.54
Texas 5.97 5.66 5.63
New Mexico 5.36 5.29 5.37
U.S. 7.09 6.85 6.73

Natural gas prices in Texas and its neighbors

Despite being the nation’s largest producer (by far) of natural gas, Texas rates – expressed in dollars per thousand cubic feet (ccf) – exceed the national average by nearly 6 percent. As for the neighbors, three of the four beat Texas residential natural gas prices:

Residential natural gas rate (dollars/thousand cubic feet) September October November
Arkansas 20.94 18.54 9.10
Louisiana 17.20 17.23 11.11
New Mexico 13.81 11.63 7.27
Oklahoma 27.06 22.01 9.03
Texas 22.40 21.13 9.98
U.S. 17.81 12.62 9.43

Commercial natural gas prices in Texas weren’t available for November, but they were nearly 8 percent lower than the national average the previous month. Historically, they’ve consistently been among the lowest in the region:

Commercial natural gas rate (dollars/thousand cubic feet) September October November
Arkansas 8.95 8.50 6.87
Louisiana 8.14 8.28 8.17
New Mexico 6.07 6.07 5.25
Oklahoma 14.75 13.79 7.30
Texas 6.92 7.03 NA
U.S. 8.33 7.63 7.03

Again, Texas produces by far the most natural gas, and its industrial rate of $2.76/ccf is nearly 29 percent lower than the national average. But neighboring Oklahoma beats that rate handily. The full picture:

Industrial natural gas rate (dollars/thousand cubic feet) September October November
Arkansas 6.37 7.13 5.87
Louisiana 2.70 2.91 3.38
New Mexico 3.78 3.85 4.13
Oklahoma 1.92 2.04 2.41
Texas 2.53 2.54 2.76
U.S. 3.35 3.43 3.87

What about electricity production?

Here’s where Texas puts its neighbors to shame, producing the most electricity in the country – 36,418 thousand megawatthours. That’s five times as much as Louisiana and by far the largest amount in the country.

State % of US total
Arkansas 1.5
Louisiana 2.3
New Mexico 0.9
Oklahoma 1.8
Texas 11.5

What does the region use to generate electricity? Natural gas, coal, and wind are the big three, though Arkansas and Louisiana lean heavily on nuclear plants, too. Here’s the breakdown in electricity generation in those states and how it compares with national generation:

State Total electricity (thousand megawatthours) % from coal % from hydroelectric % from natural gas % from nuclear % from solar % from wind
Arkansas 4,698 41.3 4.6 32.3 19.4 0.3 0.0
Louisiana 7,421 4.5 1.2 65.7 21.0 0.0 0.0
Oklahoma 5,751 3.5 2.6 51.7 0.0 0.1 41.8
Texas 36,418 18.6 0.2 50.1 9.6 1.0 19.6
New Mexico 2,828 44.1 0.0 29.8 0.0 3.6 22.7
US 316,855 23.9 6.5 37.2 20.2 2.1 8.1

Just as you have to break eggs to make an omelet, making electricity creates carbon dioxide emissions. According to the latest EIA numbers on emissions, Texas leads the region – and indeed the nation – in generating carbon dioxide.

Carbon emissions by state (million metric tons)
Arkansas 62.4
Louisiana 209.1
New Mexico 48.4
Oklahoma 96.9
Texas 653.8
U.S. 5,161.00

In closing, Texas rates generally beat U.S. averages, but they don’t match up as well against their neighbors.

Arthur Murray directs ChooseEnergy.com’s newsroom. His articles have appeared on Zillow.com, Business.com, Nasdaq.com, and USNews.com, among others. You may reach him at amurray@chooseenergy.com.

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