Whether you’re a believer in or a naysayer of the theory that greenhouse gases are the main cause of global warming, you probably wouldn’t dispute that energy conservation is a good thing. What’s that? You don’t care about saving energy? Then maybe the financial angle will convince you to consume less power:

Electricity prices in 2006 made the largest one-year jump since 1981, according to the Energy Information Administration (EIA). Retail prices climbed 9.3 percent to a nationwide average 8.9 cents per kilowatt-hour, with homeowners in the East hit hardest by the hikes. For a breakdown of the numbers, see this EIA page.

The EIA’s recent announcement won’t come as a surprise to Maryland residents, some of who have watched their bills increase a whopping 65 percent since the beginning of 2006, a surge that played a  role in that state’s 2006 gubernatorial election. Thirteen other states and the District of Columbia shouldered increases of 10 percent or more from 2005 to 2006.

A major factor in the 2006 increase was the rising cost of fuel (the delivered cost of coal, which is used to generate nearly half the country’s electricity, went up 9.7 percent, while production of natural-gas-fired electricity, the priciest to generate, rose 7.3 percent). But deregulation also proved a key component.

In the mid- to late 1990s, many states deregulated their electric industries in an effort to lower prices through free-market competition. The competition didn’t come yet prices held steady even as actual energy costs increased. But in 2006, the caps that states had placed on retail prices to maintain market stability expired and electricity prices shot up.

It could be argued that consumers are simply feeling a decade’s worth of incremental increases in one fell swoop. Still, it’s clear that free-market competition hasn’t yet lived up to expectations—electricity costs are climbing—and as caps are lifted in other regions of the country, price hikes will hit more households.

If you live in a deregulated state, you can shop around for the cheapest electricity. (The map here shows how the country looked in 2003, though note some states, including Virginia, are in the process of reregulating.) Look on your utility bill, which might include the “price to beat” for electricity in your market. Or you can look to your state’s public-service commission. The Maryland commission’s Web site, for example,  has a feature on its Web site that provides customers with information on competitive companies in the region and advice about choosing among them.

Our recent article on buying green electricity also offers additional insights into switching power suppliers.

You can also curb your own energy consumption—a good idea whatever the going rate of electricity. Read our expert advice for 10 easy ways to save hundreds of dollars on energy costs at your house. Also check out our recent reports on windows and thermostats, two home products that can help you lower your utility bills.—Daniel DiClerico