Alaska's isolation a factor in high electricity costs

(The Center Square) - Alaskans pay the second-highest electricity costs in the nation, but the state’s policies avoid pitfalls that keep costs from being even higher, according to a report.

Alaska faces the challenge of being more isolated than most states. The only state more isolated than Alaska, Hawaii, was found to have the highest electricity prices overall. However, Hawaii’s policies exacerbate the problem while Alaska’s do not, report author Joe Trotter told The Center Square.

“Between the lack of interconnection with the lower 48 state grids and unique geographic challenges for building and maintaining infrastructure through the vast state, Alaskans pay some of the highest prices for electricity in the nation,” Trotter said. “From a policy perspective, the state does well in avoiding carbon taxes and renewable mandates. Despite facing some of the same challenges Hawaii faces, Alaskans pay about two-thirds that Hawaiians do for electricity.”

The American Legislative Exchange Council’s Energy Affordability Report examines electricity, gasoline, and diesel prices across the U.S. while considering various state government policies impacting prices.

Alaskans pay 20.02 cents per kilowatt hour, a good deal lower than what Hawaiians pay at 30.31 cents per kilowatt hour, the report found. The state with the lowest electricity prices was Idaho, which charged 8.16 cents per kilowatt hour.

In general, states with more government mandates around electricity had higher prices. Alaska does not impose a Renewable Portfolio Standard or a Regional Greenhouse Gas Initiative, as many other of the most expensive states do, according to the report. However, Alaska does have state-mandated rules for specific utilities.

Alaskans pay less per year on gasoline than drivers in many other states despite having the eighth-highest average gas prices, the report said. This is due to Alaskans driving fewer miles per year than drivers elsewhere.

On average, Alaskans will drive around 11,111 miles per year. With gas costing $3.83 at the time of the report, Alaskans will spend an estimated $1,700 on gas this year, according to the report.

Conversely, drivers in Wyoming see lower gas prices but drive substantially more at an average of over 24,000 miles per year and can expect to spend over $3,000 on gas this year, according to the report.

Alaska fares better in diesel costs. Alaskans pay $4.01 for diesel fuel plus a $0.09 tax at the time of the report. The average trucker in Alaska can expect to spend approximately $27,754 on diesel this year – the fifteenth lowest diesel costs in the U.S., according to the report.

The most expensive state for diesel was Hawaii, where truckers will spend an estimated $40,977 on diesel fuel this year, the report said.