Independent comparison resource. Not affiliated with any utility or energy provider. Updated 30 March 2026.

Electricity Cost Comparison: National Average 16.88 Cents/kWh, But Your State Might Charge 2x to 4x More

Residential electricity rates range from 10.65 cents/kWh in Idaho to 43.18 cents/kWh in Hawaii. In the 15 deregulated states, switching providers can save $200 to $600 per year. Use our calculator to see exactly how your costs compare and where you can save.

Calculate Your CostAll 50 State Rates

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2009002,0003,000

Monthly Cost

$128

14.20 cents/kWh

Annual Cost

$1,534

900 kWh/mo x 12

Cost Per Day

$4.20

Annual / 365 days

Texas Average

$128/mo

14.20 cents/kWh

vs National Average (16.88 cents/kWh)

National avg monthly: $152

$-24/mo

vs Cheapest State (Idaho, 10.65 cents/kWh)

Idaho avg monthly: $96

+$32/mo

vs Most Expensive (Hawaii, 43.18 cents/kWh)

Hawaii avg monthly: $389

$-261/mo

How Electricity Is Priced: Generation, Transmission, and Distribution

The price you pay per kilowatt-hour is not a single charge. Your electricity bill reflects three distinct stages of getting power from a power plant to your light switch, each adding cost. Understanding this breakdown reveals why rates differ so much between states and why shopping for a cheaper provider only affects part of your bill.

Generation (40 to 60% of your bill) covers the cost of producing electricity at power plants. This is the most variable component and the primary reason rates differ between states. States with abundant hydroelectric power like Washington and Idaho generate electricity for 2 to 4 cents per kWh. States burning natural gas typically generate at 4 to 7 cents per kWh. Hawaii, which imports petroleum by tanker ship, generates at 15 to 20 cents per kWh. In deregulated markets, the generation charge is the portion you can shop. Competing suppliers buy wholesale electricity and sell it to you at different rates, with margins typically adding 1 to 3 cents per kWh above wholesale.

Transmission (5 to 15% of your bill) covers the cost of moving electricity from power plants to local substations through high-voltage power lines. These lines can carry electricity hundreds of miles. Transmission costs are regulated by the Federal Energy Regulatory Commission (FERC) and are generally similar across states, adding 1 to 3 cents per kWh. States with congested grids, particularly the Northeast corridor, have higher transmission costs because the existing lines operate near capacity during peak demand.

Distribution (20 to 35% of your bill) covers the last mile of delivery from your local substation to your home through neighborhood power lines and transformers. Your local utility owns and maintains the distribution network regardless of who generates your electricity. Distribution charges include meter reading, line maintenance, storm damage repair, and infrastructure upgrades. These costs are set by your state public utility commission and cannot be shopped or negotiated, even in deregulated markets.

Electricity Rates by State: Most Expensive and Cheapest

The gap between the cheapest and most expensive states is a factor of 4x. A household using 900 kWh per month pays $96 in Idaho but $389 in Hawaii. Here are the 10 highest and 10 lowest states for residential electricity rates.

10 Most Expensive States

  1. 1. Hawaii - 43.18 cents/kWh ($389/mo at 900 kWh)
  2. 2. Connecticut - 29.92 cents/kWh ($269/mo)
  3. 3. Massachusetts - 28.55 cents/kWh ($257/mo)
  4. 4. California - 27.30 cents/kWh ($246/mo)
  5. 5. New Hampshire - 27.03 cents/kWh ($243/mo)
  6. 6. Rhode Island - 26.80 cents/kWh ($241/mo)
  7. 7. Maine - 24.10 cents/kWh ($217/mo)
  8. 8. New York - 23.20 cents/kWh ($209/mo)
  9. 9. Alaska - 22.75 cents/kWh ($205/mo)
  10. 10. Vermont - 21.20 cents/kWh ($191/mo)

10 Cheapest States

  1. 1. Idaho - 10.65 cents/kWh ($96/mo at 900 kWh)
  2. 2. Washington - 11.20 cents/kWh ($101/mo)
  3. 3. Utah - 11.45 cents/kWh ($103/mo)
  4. 4. Wyoming - 11.85 cents/kWh ($107/mo)
  5. 5. Kentucky - 12.10 cents/kWh ($109/mo)
  6. 6. North Dakota - 12.15 cents/kWh ($109/mo)
  7. 7. Louisiana - 12.18 cents/kWh ($110/mo)
  8. 8. Tennessee - 12.20 cents/kWh ($110/mo)
  9. 9. Arkansas - 12.35 cents/kWh ($111/mo)
  10. 10. Oklahoma - 12.40 cents/kWh ($112/mo)

For a full breakdown of all 50 states with energy sources and market type, see our complete state-by-state guide.

Understanding Your Electricity Bill Breakdown

Most residential electricity bills include four components. Knowing what each one represents helps you identify where you have the most leverage to reduce costs. In deregulated states, you can shop the supply charge. In all states, you can reduce the total bill by lowering usage through efficiency improvements.

Supply / Energy Charge

The cost of generating electricity, priced per kWh consumed. This is the rate you see advertised by electricity providers in deregulated markets. At the national average of 16.88 cents per kWh, a home using 900 kWh pays approximately $95 to $106 for the supply charge alone.

50 to 70%

Delivery / Distribution Charge

Fixed and variable charges from your local utility for maintaining the poles, wires, transformers, and meters that deliver electricity to your home. This charge is set by your state public utility commission and applies regardless of which supplier you choose. Typical delivery charges add $30 to $60 per month.

25 to 40%

Taxes and Government Fees

State and local taxes, renewable energy surcharges, nuclear decommissioning fees, universal service fund contributions, and other regulatory mandates. These vary by state. California residents pay a Public Purpose Programs surcharge. Connecticut charges a Renewable Energy Investment Fund fee.

5 to 10%

Other Fees and Adjustments

Customer charge (flat monthly fee for having an account, typically $5 to $15), fuel adjustment charges that pass through wholesale fuel cost changes, and seasonal rate adjustments. Some utilities also charge demand fees for commercial customers based on peak electricity draw during the billing period.

0 to 5%

Because delivery charges account for 25 to 40% of your total bill, saving 20% on the energy rate only reduces the total bill by 10 to 14%. This is why usage reduction through efficiency improvements often saves more than rate shopping alone.

Fixed vs Variable Rates: Quick Overview

In deregulated states, you choose between fixed-rate plans and variable-rate plans. Fixed rates lock your price per kWh for 12 to 36 months. Your bill stays predictable regardless of market swings. Variable rates change monthly with wholesale electricity prices. They can be cheaper during mild spring and fall months but spike sharply during summer heat waves and winter cold snaps.

Fixed Rate

Locked price for 12 to 36 months. Predictable monthly bills. No benefit when market prices drop. Early termination fees of $50 to $200. Best for budget-conscious households and anyone staying at their current address for a year or more.

Variable Rate

Price changes monthly with the market. Can be 10 to 30% cheaper during mild months. Risk of 50 to 200% price spikes in summer and winter. No contract or early termination fee. Best as a short-term option while shopping for a good fixed rate.

For a detailed comparison with seasonal strategy and risk analysis, read our fixed vs variable rate guide.

Deregulated vs Regulated Markets: Can You Choose Your Provider?

Whether you can do anything about your electricity rate depends on whether your state has deregulated its electricity market. In regulated states, one utility company provides both delivery and generation, and the state public utility commission sets the rates. In deregulated states, generation is competitive while delivery remains regulated.

Regulated States (35 states)

One utility provider handles everything. Rate changes require public utility commission approval, which can take months. You cannot shop for a different electricity supplier. Rate increases are typically 2 to 5% per year.

Your options to save:

  • Reduce usage through efficiency improvements
  • Install rooftop solar with net metering
  • Enroll in time-of-use rate plans (where offered)
  • Subscribe to community solar programs (5 to 15% savings)

Deregulated States (15 states + DC)

You choose your electricity supplier. The utility still delivers power through its infrastructure, but competing retail electricity providers (REPs) offer different rates, contract terms, and renewable energy options. Shopping around can save $200 to $600 per year.

Deregulated states:

Texas, Ohio, Pennsylvania, Illinois, New York, Connecticut, Massachusetts, Maryland, New Jersey, Delaware, Maine, New Hampshire, Rhode Island, Virginia, Montana, Michigan, and Washington DC

Each deregulated state provides an official comparison tool where you can compare supplier rates by zip code. Texas has PowerToChoose.org, the largest competitive marketplace with over 100 retail providers. Pennsylvania has PAPowerSwitch.com. Ohio has EnergizeOhio.gov. These tools let you compare rates, contract lengths, renewable energy content, and customer reviews side by side.

One critical detail: even in deregulated states, you can only shop the generation or supply portion of your bill (50 to 70% of the total). The delivery charge remains fixed by your local utility. So a 20% reduction in your supply rate translates to roughly 10 to 14% off your total bill, not 20%. Still, on a $200 monthly bill, that saves $20 to $28 per month, or $240 to $336 per year.

Seasonal Pricing Variations

Electricity prices follow predictable seasonal patterns driven by demand for heating and cooling. Understanding these patterns helps you time your rate shopping and budget for higher-cost months.

Spring (Mar to May)

Lowest prices

Mild weather means minimal heating or AC demand. Wholesale prices drop 15 to 25% below annual average. This is the best time to lock in a fixed rate for the coming year.

Summer (Jun to Aug)

Highest prices

Air conditioning drives peak demand. Wholesale prices spike 20 to 40% above average. In Texas and the Southeast, summer bills are typically 40 to 60% higher than spring bills for the same home.

Fall (Sep to Nov)

Declining prices

Demand drops as AC season ends and heating has not started. Second-best time to shop for a fixed rate. Prices typically return to near-spring levels by October.

Winter (Dec to Feb)

Variable prices

Natural gas heating competes with electricity generation for fuel supply, pushing up wholesale costs. In cold snaps, prices can spike dramatically. The February 2021 Texas storm sent wholesale prices from $50/MWh to $9,000/MWh.

Electricity Rate Trends: 2020 to 2026

The national average residential rate has increased from 13.31 cents per kWh in 2020 to 16.88 cents per kWh in 2026, a 27% increase over six years. Annual rate increases of 2 to 4% are projected through 2030, driven by three major factors.

First, utilities across the country are investing in grid modernization. Much of the US electrical grid was built in the 1960s and 1970s. Replacing aging transformers, upgrading poles, and burying power lines to prevent wildfire ignition (particularly in California) requires massive capital investment that gets passed to ratepayers. Pacific Gas and Electric alone has budgeted $5.9 billion for wildfire mitigation through 2026.

Second, electricity demand is growing faster than at any point in the last two decades. Data centers for AI training and cloud computing, electric vehicle charging infrastructure, and the electrification of heating systems are all adding load to the grid. The Electric Power Research Institute projects US electricity demand will grow 1.5 to 2.5% per year through 2030, up from near-zero growth during the 2010s.

Third, the transition from coal to natural gas and renewables requires building new generation capacity while maintaining existing plants during the transition. States like Ohio and Indiana are retiring coal plants that generated cheap electricity and replacing them with natural gas and wind facilities that have higher upfront capital costs, though lower fuel costs over time. The net effect is modestly higher rates during the transition period of the 2020s, with potential stabilization in the 2030s as renewable fuel costs are effectively zero.

6 Quick Ways to Reduce Your Electricity Bill

Smart thermostat

$100 to $150/year

Cost: $100 to $250

All HVAC homes

LED bulbs throughout

$75/year

Cost: $50 to $100

All homes

Switch providers

$200 to $600/year

Cost: Free

Deregulated states

Time-of-use rates

$240 to $720/year

Cost: Free

Where TOU offered

Power strips for phantom loads

$100 to $200/year

Cost: $25 to $50

All homes

Solar panels

$1,500/year avg

Cost: $14K to $18K (after credit)

Homeowners

See our detailed guide to saving on electricity with 10 strategies, estimated dollar savings, and implementation details.

Frequently Asked Questions

What is the average electricity rate in the United States in 2026?+
The national average residential electricity rate is 16.88 cents per kWh as of early 2026. This represents a steady increase from 13.31 cents per kWh in 2020, driven by grid infrastructure investments, rising natural gas costs, and growing demand from data centers and electric vehicles. Rates vary dramatically by state, ranging from 10.65 cents per kWh in Idaho to 43.18 cents per kWh in Hawaii.
Why is my electricity bill so high compared to my neighbors?+
Several factors explain bill differences between households in the same area. Home size and insulation quality affect heating and cooling costs significantly. Older homes with single-pane windows and poor insulation can use 30 to 50% more electricity than well-insulated homes. The age and efficiency of your HVAC system matters: a 15-year-old AC unit uses 20 to 40% more electricity than a modern high-efficiency model. Electric water heaters, pool pumps, and EV charging can add $50 to $200 per month. In deregulated states, you and your neighbor may be on different plans with different rates per kWh.
What is a deregulated electricity market and which states have them?+
In a deregulated market, you can choose your electricity supplier, the company that generates your power. The local utility still delivers electricity through its wires, but you shop among competing suppliers for the best rate per kWh. Approximately 15 states plus Washington DC have deregulated residential electricity markets: Texas, Ohio, Pennsylvania, Illinois, New York, Connecticut, Massachusetts, Maryland, New Jersey, Delaware, Maine, New Hampshire, Rhode Island, Virginia, Montana, and Michigan. In these states, comparing providers can save $200 to $600 per year.
Should I choose a fixed or variable electricity rate?+
Fixed rates lock your price per kWh for the contract term, typically 12 to 36 months. You get predictable bills but cannot benefit from market price drops. Variable rates change monthly with market conditions and can save money during mild weather months, but spike during peak demand in summer and winter. For most households, fixed rates offer better value because they eliminate the risk of bill spikes during extreme weather. Lock in a fixed rate in spring or fall when market rates are lowest.
How do I read and understand my electricity bill?+
Your electricity bill has four main components. The energy or supply charge (50 to 70% of the bill) covers the cost of generating electricity, priced per kWh. The delivery or distribution charge (25 to 40%) covers the cost of maintaining power lines and infrastructure to deliver electricity to your home. Taxes and regulatory fees account for 5 to 10% and include state taxes, renewable energy surcharges, and other government-mandated fees. In deregulated markets, you can shop the supply charge but the delivery charge is set by your local utility and cannot be changed.
How much can I save with solar panels on my home?+
A typical 8kW residential solar system costs $20,000 before the 30% federal tax credit, bringing the net cost to approximately $14,000. In sunny states, this system produces 10,000 to 12,000 kWh per year, offsetting $1,200 to $1,800 in annual electricity costs depending on your rate. The average payback period is 6 to 10 years. With net metering, excess energy you send back to the grid earns credits on your bill. Solar panels typically last 25 to 30 years, so after payback you enjoy 15 to 20 years of nearly free electricity.
What are time-of-use electricity rates and should I switch?+
Time-of-use (TOU) rates charge different prices depending on when you use electricity. Off-peak hours, typically 9pm to 7am, can be 20 to 40% cheaper than peak hours (4pm to 9pm on weekdays). If you can shift laundry, dishwasher runs, EV charging, and other flexible usage to off-peak times, TOU plans can save $20 to $60 per month. TOU rates work best for households with predictable schedules and the flexibility to run appliances overnight. They are less beneficial if you work from home and consume most electricity during peak hours.
Why does electricity cost so much more in Hawaii and New England?+
Hawaii pays the highest electricity rates in the nation (43.18 cents per kWh) primarily because the state imports petroleum by tanker for roughly 60% of its power generation. Oil-fired electricity is 3 to 4 times more expensive than natural gas or hydroelectric. New England states like Connecticut (29.92 cents), Massachusetts (28.55 cents), and New Hampshire (27.03 cents) face high costs due to natural gas pipeline constraints during winter, aging grid infrastructure, and aggressive renewable energy mandates that require ongoing capital investment. These states are investing heavily in offshore wind to reduce long-term costs.