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Energy Affordability Index
With energy costs rising, discover which states in Australia and the US are most affected in our Energy Affordability Index.
The cost of living continues to rise in Australia and the United States, with electricity prices rising on top of other household bills, impacting many people financially across both countries.
A new study by energy comparison service, iSelect, reveals that New South Wales, South Australia and Tasmania are among the most impacted by the pressures of energy affordability, alongside Hawaii, Alabama and Louisiana in the US.
By integrating energy price data and cost trends with income, the Energy Affordability Index identifies which regions experience the highest electricity burden across Australia and the United States
Energy affordability in Australia
According to our Energy Affordability Index, the regions that could be feeling the greatest energy bill pressure in Australia are New South Wales, South Australia and Tasmania.
NSW was ranked first with the highest monthly energy bill in Australia at AU$198 and the second-highest electricity price change since 2021 at 36.1%! South Australia followed with the second-highest energy bill in Australia, paired with a lower monthly income, meaning they had the highest percent of income spent on energy bills. Tasmania reported an average monthly energy bill spend of AU$154, but combined with the lowest monthly income in Australia, they were ranked in third.
Notably, Queensland had the highest energy bill price change of 40.3% since 2021 but reported a below average monthly energy bill spend of AU$137. Meanwhile, Western Australia, the Northern Territory and Victoria all reported a decrease of monthly energy bills since 2021.
Energy affordability in the United States
Electricity affordability in the US could be causing a feeling of strain in Hawaii, Alabama, Louisiana, West Virginia and Mississippi, which could be creating financial pressure for households in these states.
Hawaii topped the index with the highest monthly energy bill at US$200, while Louisiana followed with US$185. On top of exceedingly high bills, all top five states but Hawaii had some of the lowest monthly wages across the US. Compounding high bills with low wages can create an even greater sense of financial pressure.
When comparing income spent on energy bills, the electricity affordability strain was highest in Mississippi (3.6%), Alabama (3.6%), West Virginia (3.5%) and Louisiana (3.1%). While some of these bills aren’t the highest nationally, the lower average wages make electricity costs much more burdensome. In contrast, many Northeastern states recorded high electricity bills, but their higher household incomes helped cushion the financial impact compared with the South.
Western states saw the highest growth in electricity pricing changes since 2019. Hawaii saw the most significant at 38.3%, followed by Louisiana at 35% and then California at 32.2%. Only two states saw a decline in pricing with North Dakota at-4.9% and Nebraska with -2.8%.
Nationally the costs are rising, putting further financial pressure on households.
“Rising cost-of-living pressures continue to put strain on Australian households, with energy bills remaining a major contributor. Electricity prices have increased across many parts of the country, adding pressure to families already managing higher essential costs.
These findings highlight the importance of regularly comparing energy providers to ensure consumers aren’t paying more than they need to. At iSelect, we help Australians compare plans from a range of providers to find options that suit their budget and lifestyle.”
Julia Paszka
General Manager – Utilities at iSelect
Written by:
Sarah Grealy
Digital Public Relations Specialist
0413 363 690
Sarah is our Digital Public Relations Specialist, and brings more than a decade of experience in the insurance comparison industry to iSelect.
With a passion for storytelling through data-driven insights, Sarah strives to empower Aussies with practical guides and tips.
About the data
The index combines indicators of electricity cost, affordability, and recent price changes. Together, these factors highlight areas where households are most likely to experience ongoing bill pressure.
Index structure
Each factor was collected and converted into a normalised score between 0 and 1.
Scores were then combined with equal weighting to produce a final index score out of 100, with regions ranked from highest energy cost affordability to lowest.
Factors used
1) Average Monthly Electricity Bill
This measures the typical monthly electricity bill for households in each region.
Higher monthly bills contribute to a higher switch pressure score.
2) Electricity Bill as a Percentage of Income (Affordability)
To estimate affordability pressure, the monthly electricity bill was compared against monthly income.
This was calculated as:
Electricity bill ÷ monthly income
This produces an affordability percentage showing how much of a typical wage is absorbed by electricity costs.
Higher affordability burden contributes to a higher energy affordability score.
3) Electricity Price Change (Historical Cost Pressure)
To capture recent price pressure, a historical price-change metric was included for each region.
Due to differences in available public data, this metric was calculated differently for the US and Australia:
United States
Electricity price change was calculated using retail electricity prices (cents per kWh) by state.
This provides a direct measure of how the unit cost of electricity has shifted over time.
Australia
Electricity price change was calculated using the ABS Consumer Price Index (CPI) electricity series for each capital city, mapped to the corresponding state/territory.
This CPI series reflects changes in electricity costs experienced by households over time, including the impact of rebates and bill relief, and provides the most consistent long-run historical dataset available for regional comparison.
Higher price change contributes to a higher energy affordability score.
Weighting
All factors were given equal weight:
Average monthly bill: 33%
Electricity affordability (% of income): 33%
Electricity price change: 33%
Indexing rules
Higher Energy Affordability scores reflect regions where households are likely to face greater financial strain on their energy bills.
The index increases when:
– monthly bills are higher
– electricity takes up a larger share of income
– prices have risen more strongly over time
Notes
All data was collected from publicly available sources and reflects the latest available values at the time of analysis.
The US and Australia price-change metrics use different underlying datasets due to differences in historical regional electricity pricing availability
The Australian CPI electricity series is capital-city based and is used as a state/territory proxy, consistent with ABS regional CPI reporting.
The index is designed as a comparative energy affordability ranking rather than a precise prediction of individual household bills.
iSelect does not compare all energy insurance providers or policies in the market. The availability of policies will change from time to time. Not all policies available from its providers are compared by iSelect and due to commercial arrangements, your stated needs and circumstances, not all policies compared by iSelect are available to all customers. Some policies and special offers are available only from iSelect’s contact centre or website. Click here to view iSelect’s range of providers.
About 
At iSelect, we’re passionate about making Aussies’ lives easier by saving them time, effort and money. We are Australia’s go-to destination for comparison across insurance, utilities and personal finance products made available from our range of providers. Our service is provided at no cost to the customer.
iSelect does not compare all energy providers or plans in the market. The availability of plans may change from time to time, depending on who iSelect’s providers are and what plans they make available to iSelect. Not all plans made available from iSelect providers may be compared by iSelect either due to commercial arrangements, area or availability, so not all plans or providers compared by iSelect will be available to all customers. Some plans and special offers are available only from iSelect’s contact centre or website. Energy plans are available only for properties located in eligible areas of Victoria, New South Wales, South East Queensland, South Australia and ACT (where currently, iSelect only partners with ActewAGL). Click here to view iSelect’s range of providers.