Wiktor Wise
The going rate for electricity depends on a variety of factors, including location, seasonality, and market shifts. As of 2025, the average cost of electricity in the United States is around 12.89 to 19 cents per kilowatt-hour (kWh). However, this rate varies significantly across different states, with North Dakota having one of the lowest rates at 10.21-11.69 cents/kWh, and Hawaii having the highest rates, ranging from 42.34 to 42.44 cents/kWh. These rates are influenced by factors such as energy consumption, state regulations, access to resources, and market conditions. For example, states with abundant natural resources tend to have lower electricity rates, while states with limited resources or a heavy reliance on expensive sources, like natural gas, tend to have higher rates. Additionally, electricity rates can fluctuate throughout the day and year, with prices typically being lower during times of reduced demand, such as mornings, nights, and weekends.
| Characteristics | Values |
|---|---|
| Average electricity rate in the US | 12.89¢–19¢ per kWh |
| Average electricity rate in Hawaii | 42.34¢–42.44¢ per kWh |
| Average electricity rate in North Dakota | 10.21¢–11.69¢ per kWh |
| Average commercial electricity rate in Texas | 9¢ per kWh |
| Average electricity rate in California | 31.77¢ per kWh |
| Average residential electricity rate | 16.44¢ per kWh |
| Factors influencing electricity rates | Energy consumption, state regulations, access to resources, market conditions, types of energy generation, demand, seasonal variations, market shifts, policy changes, time of use, weather conditions |
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What You'll Learn
Average electricity rates in the US
The average electricity rate in the United States is around 12.89 cents per kilowatt-hour (kWh) as of July 2025. However, this figure can vary widely across different states and regions. For instance, North Dakota, a state with abundant natural resources, boasts the lowest average electricity rate of 10.21 cents per kWh for residential customers and 7.18 cents per kWh for businesses. In contrast, Hawaii, a state with limited resources, has the highest rates, with residential customers paying 42.34 cents per kWh.
Several factors influence the variation in electricity rates across the country. One key factor is energy consumption; states with higher demand and a higher cost of living, such as those in the Northeast, tend to have higher electricity rates. Additionally, state regulations and access to resources play a significant role. States with abundant natural resources tend to have lower electricity rates, while states with limited resources or a heavy reliance on expensive sources of power, like natural gas, often see higher prices.
Market conditions and seasonal variations also impact electricity prices. For example, heat waves can cause spikes in electricity prices due to increased air conditioning usage, leading to higher demand and, consequently, higher rates. Similarly, the time of day can affect electricity rates, as energy suppliers forecast demand throughout the day, and using energy during peak demand hours can result in higher rates.
The future of electricity rates remains uncertain, with the increasing demand for renewable energy, advancements in technology, and changes in government policies all potentially influencing their trajectory. However, with the rise of deregulated markets, consumers are gaining more opportunities to compare rates and choose energy providers that best suit their needs. Understanding these factors and staying informed about real-time energy prices can help consumers manage their electricity bills and make informed decisions about their energy choices.
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Factors influencing electricity rates
The going rate for electricity varies depending on several factors, and these factors influence electricity rates. The average electricity rate in the United States is said to be between 12.49¢ and 19¢ per kilowatt-hour (kWh). However, this rate can be as low as 10.21¢/kWh in North Dakota and as high as 42.34¢/kWh in Hawaii.
Energy Consumption and Demand:
Energy consumption is a significant factor in determining electricity rates. When electricity consumption goes up, the electricity rate tends to increase as well. Demand for electricity is usually higher during specific seasons, such as summer, when people use more air conditioning, or in extreme weather conditions. Electricity prices generally increase when demand is high, as more expensive generation sources are utilised to meet the increased demand.
Location and Fuel Costs:
The price of electricity varies depending on where you live. Local fuel costs and power plant availability directly influence electricity rates. States with abundant natural resources, such as North Dakota, tend to have lower electricity rates, while states with limited resources, like Hawaii, have higher rates. The type of fuel mix used to generate electricity also impacts the cost. For example, states relying heavily on natural gas may have higher electricity prices due to the relatively high cost of this fuel source.
Regulations and Market Conditions:
State regulations and market conditions play a role in determining electricity rates. Some states have fully regulated electricity prices, while others have a mix of regulated and unregulated prices. Changes in government policies and market shifts can cause fluctuations in energy rates. Additionally, the cost of generating, transmitting, and distributing electricity, including maintenance costs, are factored into the rates charged to consumers.
Type of Consumer:
The type of consumer also influences electricity rates. Industrial customers often pay less per kilowatt-hour (kWh) than commercial and residential customers. This is because supplying a large amount of electricity to industrial users at higher voltages is more efficient and less costly. On the other hand, distributing electricity to smaller-scale commercial and residential consumers requires more effort and infrastructure, resulting in higher rates.
Technology and Renewable Energy:
The increasing demand for renewable energy sources and advancements in technology can also impact electricity rates. As consumers seek more sustainable options, the energy market evolves, and rates may adjust accordingly. Additionally, adopting energy-efficient appliances and solar energy systems can help consumers reduce their electricity bills.
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How to save on electricity bills
The average electricity rate in the United States is around 12.89 to 19 cents per kilowatt-hour (kWh). However, electricity prices are always changing due to seasonal variations, market shifts, and policy changes. As such, it is beneficial to know some ways to save on electricity bills.
Firstly, one of the simplest ways to save on electricity is to use less of it. This can be achieved by making small habit changes, such as hanging clothes to dry, turning off the lights, and only running the dishwasher when it is full. Using a dishwasher instead of handwashing can save up to $40 in utility costs each year. Additionally, air-drying dishes instead of using the heat-dry option can reduce your dishwasher's energy use by 15% to 50%.
Secondly, upgrading to energy-efficient appliances can significantly reduce electricity consumption and costs. For example, using a microwave or toaster oven for small meals instead of an oven can substantially reduce electricity usage. Similarly, older appliances tend to be less energy-efficient, so switching to newer, Energy Star-certified models can result in considerable savings. For instance, an older dryer may waste 20% more energy than a newer model.
Thirdly, sealing your home to prevent heat loss during colder months and air leakage during warmer months can also help reduce electricity bills. According to the U.S. Department of Energy (DOE), up to a third of a typical home's heat loss occurs through windows and doors. Caulking leaks and weather-stripping windows can lead to significant savings on annual heating and cooling bills.
Lastly, smart devices and power strips can be used to control and reduce electricity usage. Smart thermostats, for example, can be programmed to adjust temperatures based on your schedule and preferences, potentially saving you around $180 a year in energy costs. Advanced power strips can also help curb energy waste from "energy vampires," or devices that still draw power in standby mode.
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Electricity rates by state
Electricity rates vary significantly across different states in the United States. The average residential electricity rate in the U.S. is between 16.44 and 17.45 cents per kilowatt-hour (kWh). However, rates can be as low as 11.59 cents per kWh in Utah and as high as 42.44 to 43.01 cents per kWh in Hawaii, the most expensive state for electricity.
Several factors influence electricity rates, including energy consumption, state regulations, access to resources, and market conditions. States with high living costs or limited natural resources tend to have higher electricity rates. For example, states that depend on natural gas imports tend to have higher rates, while those with abundant local energy resources, such as North Dakota, Nebraska, and Wyoming, benefit from lower rates.
The Northeast, including states like Massachusetts and California, tends to have higher electricity rates due to high population density, high demand, and limited regional competition. On the other hand, western and midwestern states like Idaho, North Dakota, and Nebraska are known for having more affordable electricity rates.
Energy market volatility can also cause fluctuations in electricity rates. For instance, between April 2024 and April 2025, Rhode Island experienced a 23.4% increase in residential electricity prices, while Nevada saw a decrease of 15.8%. Additionally, seasonal changes can impact electricity rates, with higher energy demand in summer or winter leading to increased rates during those periods.
It's worth noting that some states have deregulated electricity markets, such as Texas, Ohio, and Pennsylvania, where residents can choose their electricity provider and shop for the cheapest rate or select plans with specific features like renewable energy options.
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Business electricity rates
In the United States, commercial electricity rates differ across states, with Hawaii and Alaska typically having the highest rates and states like Texas and those in the Midwest boasting the lowest rates. For instance, in July 2025, North Dakota had the lowest average electricity rate of 10.21 cents/kWh for homes and 7.18 cents/kWh for businesses, while Hawaii's rates were 42.34 cents/kWh for residential and 38.29 cents/kWh for commercial customers.
The cost of electricity is influenced by factors such as energy generation methods, with states relying on cheaper sources of power, such as abundant natural resources, often having lower electricity rates. Conversely, states with limited resources or those heavily dependent on expensive sources like natural gas tend to have higher rates.
Businesses can compare electricity rates and choose suppliers in deregulated markets, similar to how residents can. Texas, for example, has a deregulated market, allowing businesses to compare rates online or by phone and select the best plan for their energy needs. Small businesses with lower electricity consumption can easily shop for competitive rates online, while larger businesses with higher energy expenditures may be able to negotiate custom rates directly with suppliers.
Understanding these business electricity rates is crucial for enterprises to manage their utility expenses effectively. By knowing their energy consumption patterns, timing of usage, and load factor, businesses can make informed decisions when selecting an electricity supplier and plan, ultimately optimizing their energy costs.
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Frequently asked questions
As of 2025, the average cost of electricity in the US is around 19 cents per kilowatt-hour (kWh). However, the rate varies across different states, ranging from 11.69 cents/kWh in North Dakota to 42.44 cents/kWh in Hawaii.
Electricity rates are influenced by various factors, including energy consumption, state regulations, access to resources, market conditions, and the types of energy generation in each state. For example, states with abundant natural resources, like North Dakota, tend to have lower electricity rates, while states with limited resources, such as Hawaii, have higher rates.
There are a few ways to save money on your electricity bill. Firstly, you can simply try to use less electricity by making small habit changes, such as hanging your clothes to dry or running the dishwasher only when it's full. Secondly, you can upgrade to energy-efficient appliances. Finally, you can take advantage of variable pricing by reducing your energy use during peak demand periods, such as hot summer afternoons, and using more energy during off-peak hours when prices are typically lower.
Yes, electricity prices are subject to change and can be influenced by seasonal variations, market shifts, and policy changes. For example, heat waves can cause spikes in electricity prices due to increased demand for air conditioning. Prices can also vary depending on the time of day, with lower demand and prices typically occurring during mornings, nights, and weekends.
You can find state-specific information on electricity rates by referring to energy-focused websites or your local government's website. These sources will provide up-to-date data on average electricity rates and pricing trends for your state or region. Additionally, some websites offer comparisons between different states, allowing you to understand how your state's electricity rates fare in comparison to others.
