Do Puerto Ricans Pay the Highest Electricity Rates in the United States?

Comparatively speaking, do Puerto Rico’s residents pay the highest electricity rates in the United States (U.S.)? The U.S. Energy Information Administration (EIA) collects data on the price of electricity for residential, commercial and industrial customers for all the U.S. states and, since 2014, for Puerto Rico.  The 2016 and 2017 data is preliminary. Thus, for this analysis we will look at 2015 electricity rates for residential customers.

The average price of electricity for residential customers in 2015 was 12.7 cents per kilowatt-hour (kWh). The scatterplot below helps us visualize the country’s different rates. Hawaii had the highest prices at 29.3 cents kWh, followed by Alaska and Connecticut.  Puerto Rico, at 20.3 cents per kWh, had the fourth highest price in the nation.

chart (55)

Even though this plot shows that Hawaii had the nation’s highest residential electricity rates in 2015, looking at this rate is not the best approach to see whether Puerto Ricans pay more for electricity than the residents of the other states. For that reason, we should look at how much of the median household’s income is devoted to electricity.

The U.S. Census estimates that the median household income for the U.S. was $56,516. At $40,593, Mississippi’s median household income was the lowest among the country’s 50 states. Maryland has the highest median household income at $75,847, while Puerto Rico’s median household earned around $18,626.

The median U.S. household devotes around 2.5% of its income to pay for electricity. The table below lists the 10 states which devote the least percentage of median household income towards electricity.

States Where the Median Household Devotes the Least Percentage of Income to Electricity (2015)
STATE % OF MEDIAN HOUSEHOLD INCOME DEVOTED TO ELECTRICITY
Utah 1.54%
Colorado 1.57%
Washington 1.64%
District of Columbia 1.73%
Minnesotta 1.75%
California 1.76%
Illinois 1.81%
Wyoming 1.82%
New Jersey 1.83%
Alaska 1.96%

The next table lists the 10 states where residents dedicate the highest percentage of their income to electricity.

States Where the Median Household Devotes the Highest Percentage of Income to Electricity (2015)
STATE % OF MEDIAN HOUSEHOLD INCOME DEVOTED TO ELECTRICITY
Louisiana 3.15%
Arkansas 3.15%
West Virginia 3.19%
Florida 3.21%
Tennessee 3.26%
North Carolina 3.43%
South Carolina 3.66%
Alabama 3.82%
Mississippi 4.06%
Puerto Rico 5.19%

What can we learn from this short analysis?

  • While Hawaii has the country’s highest electricity rates, its median household income is $73,486. Thus, the median Hawaiian household dedicates 3% of its income to pay for electricity.
  • The median Puerto Rican household, in contrast, dedicates more than 5% of its income towards electricity. This is more than double the national average, reminding us that:
    • Puerto Ricans are not only devoting the highest percentage of their income towards their electricity bills.
    • The median Puerto Rican household earns only $18,626, which is $37,890 less than the national average or $21,967 less than Mississippi, the U.S. state with the lowest median household income.
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Puerto Rico’s Veteran Population

How many veterans live in Puerto Rico? How does this population compare to the United States’ overall veterans population?

Before I start this analysis, we need to keep in mind Harry Franqui-Rivera’s research on Puerto Rican veterans. His work demonstrates that a great number of island-born Puerto Ricans who enlisted in the military did not settle in Puerto Rico following the end of their military careers. Thus, the numbers of veterans in the island does not equate the number of island-born Puerto Ricans who have served in the U.S. military.

Indeed, Franqui-Rivera’s works shows that Puerto Ricans’ military service has helped many island-born Puerto Ricans resettle in the U.S. mainland. In a recent essay, he explains that the island’s current economic woes have accelerated this process.

In this post, I will be using the U.S. Census’s 2015 American Community Survey for Puerto Rico and the United States to compare both populations. It is worth noting that some of the veterans living in Puerto Rico may not be island-born Puerto Ricans.

According to the 2015 estimates, the United States’ veteran population was 18,830,450 and Puerto Rico’s was 95,342, representing 0.5% of the total. While 8.4% of all veterans were women, in the island the figure is lower by 3.2%.

In line with Franqui-Rivera’s findings, and as illustrated in the graph below, 57% of Puerto Rico’s veterans are 64 years or older.

chart (44)

The fact that many of the island-born veterans reside in the U.S. mainland can be demonstrated by the next graph, which breaks down veterans’ military service by war periods.

chart (42)

Given Puerto Rico’s economic troubles, it is not surprising that the island’s veteran population is on average worse off economically than veterans in the United States. chart (47)

If we look at veterans’ educational attainment, the story is a a bit mixed. More than 40% of Puerto Rico’s veterans did not attend post-secondary education programs. But, on average the number of veterans with a college degree is higher in Puerto Rico than in the United States.

chart (45)

One surprising finding in the 2015 estimates is the number of veterans who have been classified as disabled. The average number of disabled veterans is higher in Puerto Rico than in the total U.S. veteran population.

chart (46) 

What explains this difference? I am not exactly sure and it is an issue that deserves closer attention. However, one plausible explanation is that the Department of Veterans Affairs may be providing many of these disabled veterans some sort of financial compensation which insulates them from the island’s economic troubles.  In this manner, we can hypothesize that most island-born veterans would like to return to Puerto Rico once they end their years of military service, but given the island’s economic troubles they are force to relocate to the U.S. mainland.