Utility Rates Surge Around the U.S.

If you think your electric bill was high this summer, wait till next year.

The Energy Department predicts that the average residential electricity bill will rise about 10% in 2009 after a 5% increase this year. Of course, those are not spread out evenly across the board, with costs varying from state to state -- and sometimes city to city -- based on a slew of factors.

Consumers throughout the Northeast have seen their rates rise dramatically in recent years due to the effects of de-regulation of the utility market there. Dense population and lack of new power lines and infrastructure to meet the region's energy demands also play a part in the higher cost.

Among the most expensive states in which to purchase electricity are Massachusetts, New York, Connecticut, Rhode Island and New Hampshire, according to the Department of Energy. To avoid sudden rate increases from deregulation, Maine's public utilities commission has even proposed becoming an "electricity island" separate from the rest of the Northeast -- one that gets its power from Canada instead.

Hawaii is the most expensive state, though that comes as no surprise. Many goods and services are more expensive in the state due to its sheer isolation from the mainland and the costs involved in delivering goods and services. Alaska has high electricity costs as well, for similar reasons.

Part of the surge in certain states has to do with the surging cost of commodities -- whether coal, natural gas or oil -- that are used to create electricity. For instance, Hawaii paid the highest rate last year not just because of its distance from the mainland, but also because it primarily uses oil, one of the more expensive commodities. On the other hand, Idaho, which uses cheap hydroelectric power, had the cheapest electricity, and other coal-producing states like West Virginia and Kentucky have consistently lower rates.