Beatrice Lang
Energy bills are influenced by a variety of factors, including location, home size, electricity rate, and occupancy. The average electricity rate in the US is 15.95 cents per kilowatt-hour, with Hawaii having the highest rate of 40.51 cents and North Dakota the lowest at 9.93 cents. Texans have had the freedom to choose their electricity provider since 1999, and there are several online tools to help them compare the best rates and plans for their needs. Similarly, Illinois has a deregulated energy market, allowing residents to choose their electricity supplier.
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What You'll Learn
Cheapest electricity rates by state
The cheapest electricity rates vary by state in the US. The average electricity rate in the US is 12.89 cents per kilowatt-hour (kWh) for residential customers and 10.27 cents per kWh for commercial customers. However, these rates can vary significantly depending on various factors such as the time of day, time of year, location, and the source of electricity.
Some of the states with the lowest electricity rates include:
- North Dakota: 8.70 cents/kWh (average) for residential customers and 7.18 cents/kWh for commercial customers.
- Idaho and Iowa: Tied for the second-lowest electricity rate in the country at 10.76 cents/kWh. More than half of Idaho's electricity comes from hydropower, while more than half of Iowa's electricity comes from wind power.
- Washington: Just above 10 cents/kWh thanks to abundant hydropower sources.
On the other hand, states with high electric prices tend to have deregulated energy markets, such as Houston, where residents can choose their energy supplier. In regulated markets, customers are typically stuck with the rate provided by their local utility company.
It's important to note that the cheapest energy provider may not be the best, as they often have negative reviews for hidden fees or poor customer service. Additionally, renewable energy providers are not always the cheapest option. When choosing an energy supplier, it's recommended to consider a company with a proven track record of quality service in your area and be wary of misleading advertising.
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Cheapest electricity rates by city
Electricity rates vary across the United States, with several factors influencing the cost of electricity in a particular state or city. The average electricity rate in the U.S. is 12.89 cents per kilowatt-hour for residential areas and 15.95 cents per kilowatt-hour overall. North Dakota has the lowest average electricity rate of 8.70 cents per kilowatt-hour for residential areas and 9.93 cents per kilowatt-hour overall. Hawaii has the highest average electricity rate of 40.32 cents per kilowatt-hour for residential areas and 40.51 cents per kilowatt-hour overall.
In Texas, residents have had the power to choose their electricity provider since 1999, with dozens of competitive providers offering a range of plans. Texas has historically had the lowest energy prices in the US. However, it is important to be aware of misleading advertisements and confusing plans when comparing rates. For example, advertised rates can be based on specific usage levels, and bill credits can be used to drive down prices. Additionally, understanding your usage patterns and peak usage months can help you find the best rate and avoid common traps. Prepaid plans, flat-rate plans, and business electricity plans are also available in Texas, offering flexibility and stability, respectively.
In Pennsylvania, the Pennsylvania Public Utility Commission regulates utilities, and residents can compare electricity plans for their homes by entering their zip codes on websites like PAPowerSwitch. This allows customers to find plans with renewable options and competitive offers, as well as decide between fixed or variable rates.
It is worth noting that electricity rates can be influenced by various factors, such as the time of day, time of year, and location. "Time of use" rates refer to the variation in prices depending on the time of day, with higher rates during peak demand periods. Southern states may experience higher summer rates due to increased energy demand for cooling systems, while northern states may see higher winter rates for heating demands. Additionally, rates can differ within the same state, depending on supply and demand. Understanding these factors can help consumers control their electricity pricing and make informed choices when selecting an electricity provider.
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Cheapest electricity rates by usage
Electricity rates vary depending on usage and location. In the United States, the average electricity rate is 15.95 cents per kilowatt-hour, with Hawaii having the highest average electricity rate of 40.51 cents per kilowatt-hour, and North Dakota the lowest at 9.93 cents. In the US, you can compare electricity rates by state and zip code, and if you live in a state with energy choice (deregulated), you can lower your bill by shopping around for different suppliers and rates.
In Europe, Italy, Ireland, and Denmark had some of the highest household electricity prices as of March 2024, with Italian households charged around 0.43 US dollars per kilowatt-hour, and Ireland close behind at 0.41 US dollars. In contrast, countries with abundant natural resources like crude oil and natural gas, such as Iran, Qatar, and Russia, enjoy some of the cheapest electricity prices globally, with households paying less than 0.1 US dollars per kilowatt-hour.
In addition to location, several other factors influence electricity rates. These include the time of day and year, with higher rates during peak demand periods, and whether a state has deregulated energy choices, allowing for supplier and rate options.
While traditionally coal-powered plants have been the most economical, renewable energy sources like solar panels are now 29% less expensive than the cheapest fossil fuel alternatives, according to the International Renewable Energy Agency (IRENA). This shift to renewables not only benefits the environment but also makes economic sense, with countries like Kyrgyzstan investing in clean energy projects to power their electricity grids.
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Cheapest electricity rates by season
The cheapest electricity rates vary depending on the season, with several factors influencing the rates in different states. Firstly, understanding your usage is crucial. Knowing your electricity consumption patterns throughout the year will help you make informed choices to secure the best rates and avoid costly traps.
During summer, southern states experience higher electricity rates due to increased energy demand for cooling systems. On the other hand, winter rates in northern states tend to be higher because of the greater need for heating during colder months. These variations in energy demand between seasons directly impact the electricity rates.
Additionally, the time of day you use energy also matters. Energy suppliers employ complex models to predict demand throughout the day. If your energy usage coincides with peak demand periods, such as during a heatwave or blizzard, you will be charged higher rates. Conversely, off-peak hours with lower demand, typically at night or during milder temperatures, offer more affordable electricity rates.
The cost of electricity also depends on the state you reside in. North Dakota boasts the lowest average electricity rate of 8.70-9.93 cents per kilowatt-hour, while Hawaii has the highest rate of 40.32-40.51 cents per kilowatt-hour. The national average falls between these extremes at 15.95 cents per kilowatt-hour.
Lastly, the type of energy generation in your state and the load factor are factors that influence electricity rates. By understanding these variables and making minor adjustments to your energy habits, you can effectively reduce your electricity costs.
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Cheapest electricity companies by state
Energy costs are climbing across the United States, and with 78% of Americans worrying about their rising energy bills, it's no surprise that many are looking for ways to cut costs. The cost of electricity varies from state to state and is dependent on a number of factors, including location, supply and demand, and weather conditions. For example, in warmer states, summer rates are often higher than winter rates due to higher energy demand for cooling.
As of April 2025, North Dakota has the cheapest residential electricity rates in the country, with 8.70-9.93 cents per kWh. This is due in part to the state's diverse energy sources, which include natural gas, coal, and renewable resources, as well as its energy efficiency programs. Other states with low electricity rates include Arkansas (9.82 cents per kWh), Idaho, Washington, and Oregon, which have access to renewable resources and efficient energy programs. West Virginia also has affordable electricity, thanks to its abundant natural resources, particularly coal, which accounts for approximately 91% of its net electricity generation.
On the other hand, Hawaii has the highest electricity rates in the country, with 40.32-40.51 cents per kWh. This is likely due to the high cost of transporting goods to the islands, as well as the state's reliance on imported fossil fuels. New England also tends to have expensive electricity, as do states in the Northeastern and Midwestern regions of the U.S.
It's worth noting that some states have deregulated electricity markets, such as Washington, D.C., allowing customers to choose their electricity supplier and take advantage of competitive rates and supplier incentives.
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Frequently asked questions
You can use a free energy marketplace like Choose Energy to compare electricity plans and providers in your area. You can also use a tool like Live Link™ to compare the best plans and rates for your home.
As of March 2025, the lowest electricity rate in Texas is 11.50¢/kWh. However, the cheapest electricity company can vary frequently, so it is worth checking.
As of March 2025, the cheapest electricity rate in Houston is 11.60¢/kWh. However, this is subject to change.
