Fairbanks utility costs top urban U.S.

A dependence on crude oil for electricity, heating and transportation combined with record high fuel prices hit Fairbanks hard

The Associated Press

A survey has found that Alaska’s second largest city has by far the highest utility costs among urban areas nationwide.

The data collected by The Council for Community and Economic Research found that residents in Fairbanks pay more than double the national average for utilities, according to the Fairbanks Daily News-Miner.

It says that Fairbanks residents paid nearly 112 percent more than the typical urban resident in 2011.

That far outpaced the second-most expensive city for utilities. That city was Juneau, where residents paid 64 percent more than the average.

Fairbanks relies heavily on oil for both heating and electric generation. Rising oil prices have directly caused a spike in utility costs in recent years, said Neal Fried, an economist with the Alaska Department of Labor and Workforce Development.

Many areas of the U.S. are benefiting from historic low prices in natural gas, which is the most common energy source in most areas but not Fairbanks.

“Anywhere that uses fuel oil in Alaska felt that spike — and for that matter, elsewhere in the country as well,” Fried said. “But most places in the country heat with gas, which helps them out.”

The survey looked at 314 cities in the U.S. It included information from four urban areas in Alaska — Anchorage, Fairbanks, Juneau and Kodiak. Anchorage, which benefits from a cheap supply of local natural gas, paid 2 percent less than the national average for utilities. Kodiak paid 52 percent above the average.

Things could be worse for Alaska urbanites. They could live in the Bush.

In January, the Alaska Department of Commerce collected price data for heating fuel and gasoline in 100 communities in Alaska, and reported that almost all rural areas have much higher utility costs than the urban centers. The highest price for heating fuel was reported in Hughes, at $9 per gallon, while the $10 per gallon gasoline in Arctic Village topped that category.