Residential electricity distribution costs in Massachusetts recently were 8.3 cents per kWh on my NSTAR bill. This is just the cost of delivering juice; the expense of generating electricity is extra. (Total cost: 16 c/kWh.)
Fun Fact? In 4 U.S. states, the TOTAL cost of residential electricity is less than just the electricity distribution costs in the Commonwealth. Yes, even if electricity generation were free here, four states would be even cheaper: Idaho, Utah, North Dakota, and Washington. Ten more states have total electricity prices within just 1 cent per kWh of Massachusetts's distribution costs. So about a quarter of the country gets its electricity for the cost that consumers in MA are charged just to move electrons around.
Massachusetts is not alone in this distinction; all state from New Jersey north share similar cost structures.
That electricity in the Northeast region is expensive is not news to any energy observer. Delivered power here is typically 50% or more expensive than the average cost in the contiguous U.S. If the Northeast were as uncompetitive in its gasoline prices as with electricity, pump prices here would be $4.70 a gallon now, instead of the U.S. average of $3.15.
Why so uncompetitive?
Most of the usual theories behind the Northeast's disadvantage run to differences in generation costs, and particularly the poor planning and/or luck that left the region without the gold standards of cheap power: large modern coal plants, or federally subsidized hydro complexes. And of course a relative fetish for high cost "green" initiatives, and power sources like wind and solar pile up extra costs.
But high distribution costs per se? This is more of a mystery. Candidate causes include a generally regional costs, high taxes, shoddy -- or cost indifferent -- regulation. Politicians who prefer high cost structures can't help.
I am most intrigued by this hypothesis: unions. High pay and benefit structures, and productivity crushing incentives and work rules, can do a real number on cost structures. In the public sector, unions encounter very limited countervailing forces. These forces strike me as potentially even weaker at cost-plus regulated utilities. And I've never seen a utility crew on my property or neighborhood distinguish itself, productivity-wise.
Have utility employee costs and productivity (and associated "prevailing wage" laws) caused comically high utility cost structures in the Northeast?
A topic for more research.