CEO’s Message – September 2024
Arizona’s Average Electricity Rates
A query about average electricity rates sent me down a rabbit hole of trying to see where Arizona’s electric cooperatives stand relative to other utilities in the state and how we compare to adjacent states. Like a rabbit, my attention span for deep dives isn’t intense, but a bit of digging yielded some interesting results.
I should offer a word of caution before listing some numbers and commentary. There are many rate plans among utilities, and monthly service charges vary widely. When co-op members or other utility customers get their bills, they generally look at the bottom line for the total cost. Rates are but 1 component of the overall cost. Use, monthly service charges, and other ancillary costs (e.g., renewable energy or energy-efficiency adders) are other variables that determine the overall cost for electricity consumers.
With those caveats in mind, I sought the most basic residential plans for each utility and excluded all other costs other than the kilowatt-hour rate. In Arizona, the average basic residential co-op rate is 9.83 cents per kWh. For reference, 12 cents is the highest, and 8 cents is the lowest. The average basic residential rate for the large utilities that serve Phoenix and Tucson is 12.6 cents per kWh. Based on this simple metric, co-ops’ basic residential rates are about 22% below the average of Arizona’s largest utilities.
According to Energybot, Arizona’s average residential electricity rate is 15.5 cents per kWh. I imagine Energybot’s research was more sophisticated than mine and includes other variables, such as larger residential use along with basic service plans and time-of-use rates. But still, it appears Arizona’s co-ops stack up pretty well. Our neighbor to the west sports average residential rates of 34.3 cents per kWh. Ouch! Other neighboring states’ average residential rates are: 11 cents in Utah, 13.8 cents in New Mexico, and 14.7 cents in Colorado.
Another recent study by WalletHub named Arizona the 49th state for overall monthly energy costs, including electricity, gasoline, natural gas, and home heating oil. Only New Mexico boasted monthly energy costs cheaper in the United States. WalletHub’s report says Arizonans spend an average of $400 a month for energy, while the national median is $620. Arizona’s electricity costs ranked 22nd overall at $152 per month. Not bad, considering most Arizonans need to keep their air conditioners running 7 to 8 months a year.
Electricity is an important part of homeowners’ budgets, and even more so for our businesses and industrial facilities. Businesses looking to relocate to another state often cite the high cost of energy as a consideration. It’s important we do all we can to keep electricity costs as reasonable as possible. Having a diverse set of energy options and being free from unnecessary regulations are 2 crucial components to helping us achieve this goal.
Dave Lock
CEO