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Electricity prices aren't created equal

Waves hit the deserted Waikiki shoreline on March 11, 2011 in Honolulu, Hawaii.

Steve Chiotakis: You know what rising oil prices do to how much you pay for gas, right? In Hawaii, high gas prices mean higher electricity bills too. That's because Hawaii gets most of its power from crude oil.

From the Sustainability desk, Marketplace's Adriene Hill reports.


Adriene Hill: A banged-up, very non-electric Kia is parked in front of Hawaii's first public electric-vehicle charging station. Annoying if anyone wanted to charge up, but the old Kia doesn't seem to be much of a problem.

The value of driving an electric car in Hawaii isn't the same as it is in other places, because most of Hawaii's electricity comes from petroleum, and because electricity from petroleum costs a lot. Residents pay about three times as much for power as the rest of the U.S., and prices have been climbing with oil costs -- over 10 percent in the last year.


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Cathy Carol: We call it kind of the "paradise tax."

Cathy Carol runs an art gallery on the island of Lanai with her husband. She turns off the lights in the gallery when they don't have customers. At home, she uses CFLs, and she uses cold water to wash her clothes.

Carol: I'm definitely a better saver with more expensive power.

Carol says she's heard about a neighbor who saves energy by using only headlamps at night to get around. Truth or rumor, hard to know.

But high electricity costs have people in Hawaii thinking about how and when they use electricity. According to the International Energy Agency, residents of Hawaii use less energy than most of the rest of us. So is higher priced electricity a good way to cut use?

Daniel Kammen: Higher costs alone aren't necessarily a good thing. They may make you conserve some, but they have a disproportionate impact on the poor.

Daniel Kammen works on renewable energy policy at the World Bank. He says by many estimates, electricity in the U.S. is undervalued. But if prices go up, he says you need good policy -- and education to go with it -- that helps people cut their energy use.

Kammen: Higher prices when combined when thoughtful policies have proven to be a real recipe for creative innovation, both financially and environmentally.

Hawaii's high prices and its dependence on petroleum have encouraged it to push for more renewable energy sources. The state is looking to the sun, wind and ocean to produce 40 percent renewable energy by 2030.

I'm Adriene Hill for Marketplace.


Steve Chiotakis: Want to know how your electricity bill stacks up? We've got a map of state-by-state electricity prices.

About the author

Adriene Hill is the senior multimedia reporter for LearningCurve.

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