We dug into the U.S. Energy Information Administration’s data to look at the average monthly electric bill for Iowa residential households. These averages are for the full year of 2018, not any specific month of 2019, given that electricity usage & prices fluctuate month-to-month.
Why Are Electric Bills in Iowa Comparatively Low?
The two factors that make up the cost an electric bill are (1) cost and (2) consumption. Looking at each, there’s not much going on when talking about Iowa’s electricity. The average residential electric rate is only 4.9% less than the national average, and the monthly electricity consumption is only 2.4% less than the national average.
Reasons for Low Electricity Rates in Iowa
Even though electricity rates in Iowa are only 4.9% less than the national average, it’s important to understand what makes electricity more or less expensive. The factors affecting this number are:
- Supply – an increase in the supply of energy brings costs down. For example, weather events such as high amounts of rain or high wind speeds can temporarily increase the supply of energy where there are hydropower plants or wind turbines to take advantage, and as a result, lower electricity rates.
- Demand – an increase in the demand for energy causes costs to rise. This is because the use of more costly fuels, such as natural gas, help “fill in” for the rise in demand. For example, a heat wave might temporarily increase the demand for cooling and the subsequent need for fuels, and as a result, raise electricity rates.
Additional factors that impact electricity rates include state & federal regulations, global markets and even financial speculation.
Reasons for Low Electricity Consumption in Iowa
Given that electricity consumption in Iowa is only slightly lower than the national average by 2.4%, it’s important to understand exactly what electricity is used for. The EIA looked at the end uses of electricity in the average American household and found the following breakdown:
“Other uses” includes small electric devices, heating elements, exterior lights, outdoor grills, pool and spa heaters, backup electricity generators, and motors not listed above. Does not include electric vehicle charging.
Tips for Lowering Electric Bill
- Reduce space heating/cooling – given that heating & cooling make up a large part of the average electric bill, increasing energy efficiency in this area can have arguably the biggest impact on your bill. Here are some things you can do to reduce your usage in this area:
- Use a programmable thermostat (can reduce heating/cooling by ~10%)
- Use extra insulation
- Dress up/down to the temperature
- Replace your air filter more often
- Check seals on windows/doors/appliances for openings/leaks
- Reduce water heating – one of the next biggest portions of the average electric bill is from water heating, which can be reduced by showering at lower temperatures, taking shorter hot showers and by lowering the temperature on the water heater itself (ideally to 120 degrees Fahrenheit).
- Adjust fridge & freezer temperatures – ideally, your fridge should be at 38 degrees and your freezer at 5 degrees Fahrenheit.
Where Does Iowa Get Its Electricity From?
Iowa uses a blend of fossil fuels and renewables for its electricity. 45% of the state’s electricity generation comes from coal, and wind power powered 34%. However, because of Iowa’s large agriculture industry, a lot of natural gas is used in the state.
Along with the aforementioned sources, Iowa produces a lot of ethanol. In fact, Iowa is the number one ethanol producer in the nation. Other sources of electricity include fuel oil, HGL, nuclear electric power, and biomass.
 Data from: https://www.eia.gov/electricity/data.php#sales