Alabamians’ financial strain over energy bills nation’s fourth-highest

When it comes to energy bill anxiety, a new study finds Alabama ranked 4th among the nation’s 50 states.

With the cost of living continuing to steadily increase, combined with massive increased costs in energy prices and gasoline, Americans are feeling new levels of financial stress paying just their essential monthly bills.

A new study by iSelect, an energy comparison service, shows Alabamians to be especially strained on their energy bills, with Alabama’s energy bills anxiety fourth-highest. The study measured online search activity related to energy awareness, financial strain and emotional anxiety, and the data showed per 100,000 Alabama residents, an average of 38,600 energy awareness searches, 378,500 financial strain searches per 100,000 residents and 32,800 emotional anxiety searches per 100,000 population.

Additionally, Alabama ranks second, only to Hawaii, in states feeling the biggest strain on their energy bills.

To calculate the rankings, iSelect integrated energy price data and cost trends with income. The resulting Energy Affordability Index is a measure of states facing the highest electricity burden for residents.

For additional information on the study, as well as a complete state-by-state breakdown, visit https://www.iSelect.com.au/energy/insights/energy-affordability-index/.

Alabama residents average monthly electricity bills of $185 and average monthly incomes of $5,184.  Electricity bills represent 3.6% of Alabamians’ total income, the highest percentage in the nation.

The price of electricity in Alabama has increased 17.9% since 2019, a period that included the COVID-19 pandemic, which crippled many Alabamians’ ability to support their families.

During the pandemic, the Tennessee Valley Authority gave all of its local power companies a rebate of 2.5% off all purchased electricity. The rationale for the rebate was to help offset anticipated revenue losses for local power companies with rate reductions and/or more lenient cutoff policies during COVID-19.

Many local power companies approved rate decreases during the pandemic as well as suspending cutoffs on delinquent accounts.
Although it also received the 2.5% TVA rebate, the Russellville Electric Board maintained its strict cutoff policy during COVID-19 and hit customers with a 3.1% rate increase during the heart of an economic-crippling pandemic in 2022.

With the majority of its residential users earning incomes well below state and national averages, this was an especially difficult blow for REB users to incur.

While there are states with significantly higher electricity costs, when combined with the low average wages, electricity cots become much more burdensome for Alabama residents.

The index combines electricity costs, affordability and price changes over a 4-6 year period. The results indicate which states’ households are most likely to experience ongoing bill pressure.