Oklahoma electricity costs among some of the highest in US but not electricity rates

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Just because reports indicate electricity prices in Oklahoma have climbed faster than more than 30 other states nationwide doesn’t mean electricity rates have risen so dramatically.

Recent stories by News 9 and Fox 25 in Oklahoma City quoted a report from the U.S. Energy Information Administration which ranked Oklahoma 18th highest compared  to a year ago when Oklahoma had some of the most affordable electricity in the country.

In June of this year, Oklahomans paid an average 13.16 per kilowatthour for electricity use in their homes. A year earlier, the price was 10.07 per kilowatthour. For all sectors, the average in June 2022 was 10.87 cents while in June of 2021, it totaled 7.30 cents.

The EIA report focused on costs and not on electricity rates.

It should be noted that Oklahoma still remains in the nation’s top 5 states for ‘regulated’ utilities with the lowest ‘rates’ of electricity, according to the Oklahoma Corporation Commission.

Why the bizarre jump in electricity costs in the state? Mostly because Oklahoma’s cost to generate electricity is more vulnerable to volatility in the market. Witness what happened in the February 2021 winter storm Uri in which some Oklahoma utilities were forced to pay $1,250/MMBtu at the height of the storm in order to keep generators running. It had nothing to do with electricity rates. Instead, it was the price utilities were forced to pay for natural gas.

A Commission spokesman also said another factor that affects energy costs is there is no longer the variety of fuel sources that once existed in Oklahoma—i.e. coal-fired power plants.

Click Here to read the full report from the U.S. Energy Information Administration.