Each month, EDCUtah’s Research Minute highlights interesting economic development data and timely research insights. This month, we explore energy costs in Utah compared to the nation.

For many years, Utah has enjoyed relatively low energy costs, for both electricity and natural gas, compared to many other states in the U.S. This is true for residential, commercial, and industrial consumers. EDCUtah routinely provides energy cost data to businesses and site selectors considering Utah for expansion, and lower energy costs have been a significant driver for corporate relocation projects to Utah from high-cost states such as California and New York.

According to the U.S. Energy Information Administration, Utah has the fourth lowest electricity costs in the nation for all sectors at 9.03 cents per kilowatt hour—behind North Dakota, Wyoming, and Louisiana. In states with higher costs, residents and businesses may pay double or even triple this amount. Hawaii’s cost per kilowatt hour is 38.7, and California is at 24.73 cents per kilowatt hour. For high energy users, these costs can be more than prohibitive; they could mean the difference between success and failure as a business. In 2023, Utah also ranked fourth in the nation for cheapest natural gas costs in all sectors, behind Idaho, North Dakota, and South Dakota. However, natural gas rates have fluctuated in Utah and other states in recent months.

High inflation in the energy sector continues to be a major hurdle for residents and businesses. Energy prices rose 4.4% from January to February in 2024, registering the highest monthly increase since August 2023, according to the U.S. Bureau of Labor Statistics compiled Producer Price Index in February.

While Utah is not immune to this inflation, residents and businesses continue to enjoy relatively low energy costs in all sectors. New data shows that Utah may become the cheapest state in the nation for energy in 2024. According to an analysis of federal data, Utah is projected to have the lowest electricity rates in the nation in 2024, with the annual costs estimated to be $1,047.27 per resident. This is significantly lower than high-cost states, like Hawaii at $3,450.55, as well as the national average of $1,730.55 per resident.  

Utah’s cost-effective energy can be attributed to a mixed portfolio approach to energy that includes wind, hydroelectric, and solar, according to representatives of Rocky Mountain Power. Rocky Mountain Power and Dominion Energy are the two primary electricity and natural gas providers in Utah and are committed to keeping energy affordable. Diversity and redundancy help keep Utah energy costs low. Coal and natural gas continue to be the highest producers of electricity in Utah, but renewable generation, including hydro, wind, solar, and other sources account for 359,000 MWh, increasing every year. ‍

For more information, including a breakdown of rates by category, email us at connect@edcutah.org or explore the benefits of investing with EDCUtah.