Beatrice Lang
Electricity rates vary across the United States, with several factors influencing the cost of electricity in each state. These factors include the cost of living, demand, access to natural resources, distribution issues, and state regulations. As of August 2025, Hawaii has the highest electricity rates in the country, with residential rates of 41.03 cents per kWh to 42.34 cents per kWh, while North Dakota has the lowest rates, with an average of 10.21 cents per kWh. The average electricity rate in the US is between 11.69 cents and 17.47 cents per kWh.
| Characteristics | Values |
|---|---|
| State with the highest electric rates | Hawaii |
| Average residential electricity rate in Hawaii | 32.06¢ per kWh (2024) |
| Average commercial electricity rate in Hawaii | 38.29¢ per kWh (2025) |
| Average residential electricity rate in Hawaii | 41.03¢ per kWh (2025) |
| Average retail price of electricity for Hawaiian residences | 44.14 U.S. cents per kilowatt-hour (2024) |
| Factors contributing to high electric rates in Hawaii | Separate electric grids for each island, heavy reliance on imported petroleum for power generation, reliance on expensive imported fuel |
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What You'll Learn
Hawaii's electricity rates
Hawaii has some of the highest electricity rates in the US. The average residential electricity rate in Hawaii is 37.34 cents per kilowatt-hour (kWh), which is more than three times the national average of 11.88 cents per kWh. This makes Hawaii's residential electricity rates the highest in the country. The average monthly residential electricity bill in Hawaii is $203, which is 89.72% greater than the national average of $107.
Hawaii's high electricity rates can be attributed to several factors. One factor is the state's isolated geographic location, which means that it doesn't have nearby utility companies to draw power from in the event of a problem. As a result, Hawaii must have reserve generating capacity and multiple distribution routes to ensure system reliability, increasing costs. Additionally, the cost of imported fuel oil used to produce electricity also significantly impacts electricity prices in the state.
The time of year and daily demand can also affect electricity rates in Hawaii. In warmer states like Hawaii, summer rates are typically higher due to the increased demand for cooling systems. Similarly, energy suppliers use complex models to forecast demand throughout the day, and if you use more energy during peak demand periods, your rate will be higher.
It's worth noting that electricity rates in Hawaii have been fluctuating. While rates in Oahu, Maui, Lanai, and Molokai decreased in 2024 compared to 2023, rates in Hawaii Island increased during the same period. Additionally, Hawaii's average electricity rates decreased by 7% from 2024 to 2025, with the latest figures showing a rate of 41.03 cents per kWh.
Hawaii's high electricity rates have significant implications for both residents and businesses. The high costs of electricity in the state can impact household budgets and affect the overall cost of living. For businesses, especially energy-intensive industries, high electricity rates can influence their operational costs and competitiveness.
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Idaho's low rates
Idaho currently has the cheapest residential electricity rates in the US, at 11.88 cents per kilowatt-hour (kWh). This is significantly lower than the national average of 17.47 cents per kWh. Idaho's low electricity rates can be attributed to several factors, including the state's energy sources and the regulated nature of its energy market.
Idaho's energy mix includes a significant proportion of hydropower, which is a low-cost and renewable source of energy. Idaho Falls Power, for example, owns and operates hydro-generation facilities and purchases low-cost hydropower from the Bonneville Power Administration, enabling them to provide affordable electricity rates for their customers.
The regulated nature of Idaho's energy market also contributes to its low electricity rates. Regulated states tend to have lower average rates compared to deregulated states. In a regulated market, energy rates are standardized, and consumers do not have the option to choose their energy supplier or plan. This contrasts with deregulated states, where consumers can shop around for suppliers and plans, potentially driving down rates through competition.
Additionally, Idaho's relatively lower demand for energy compared to other states may also be a factor in its low electricity rates. The cost of electricity is influenced by supply and demand dynamics, with areas of higher demand typically experiencing higher rates. Idaho's population and cost of living are lower than states with higher electricity rates, such as those in the Northeast.
While Idaho has the lowest average electricity rates, it's worth noting that rates can vary within the state. For instance, Idaho Power uses a tiered pricing structure, where customers are charged different rates depending on their energy consumption. The more energy a customer uses, the higher the rate they are charged. This encourages customers to conserve energy and use it efficiently. Idaho Falls Power also offers a slightly different rate, with a $0.044 per kWh used rate for commercial customers and a $0.0715 per kWh used rate for residential customers.
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Northeast's high rates
The Northeast has some of the highest electricity rates in the country, both before and after deregulation. These states have a high population density, high demand, and a high cost of living. The high rates in the Northeast can be attributed to various factors, including state policies and an over-dependence on fossil fuels.
For example, New Hampshire's lack of stringent clean energy requirements forces the state to rely on expensive, fossil fuel-generated electricity. In contrast, Vermont has lower electricity rates due to its reduced reliance on fossil fuels. The Northeast region's heavy reliance on burning imported fossil fuels, such as natural gas, to generate electricity contributes to higher electricity prices. These fuels are costly, and their prices are steadily rising, impacting the electricity rates in the region.
During extreme weather conditions, such as heat waves or cold snaps, electricity demand surges, leading to increased electricity prices. This phenomenon particularly affects New England families, who experience drastic temperature changes. The volatility in electricity prices in the Northeast can be challenging for families, forcing them to choose between basic necessities and keeping their homes comfortable.
To address the issue of high electricity rates in the Northeast, there is a growing recognition of the need to transition from fossil fuels to clean energy sources. Generating electricity from clean energy, such as solar and wind power, is much cheaper. By adopting clean energy solutions, the region can achieve more affordable and price-stable electricity while also mitigating climate change.
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Texas's wind energy
Texas has led the U.S. in wind energy over the past 17 years, largely due to its abundant space and optimal wind conditions. In 2022, Texas wind generated 40,556 megawatts (MW), accounting for more than 26% of all U.S. wind-sourced electricity. Texas has over 150 wind farms, with more than 15,300 wind turbines—the most of any state. The Roscoe Wind Complex, made up of four wind farms, is one of the largest wind farms in the U.S. and can provide wind-generated energy to over 194,000 homes.
The wind power industry in Texas has created over 24,000 jobs, with employment expected to grow by 44% by 2031. Wind power has a long history in the state, with West Texas A&M University beginning wind energy research in 1970, leading to the formation of the Alternative Energy Institute (AEI) in 1977. The growth of wind power in Texas is driven by favourable wind resources and land availability, cost efficiency, and state targets for renewable energy.
However, Texas faces opposition to wind energy from the powerful fossil fuel industry and its supporters. After Winter Storm Uri in 2021, there was a push to blame renewable energy for the blackouts that left 69% of Texans without power. Misinformation and fear-mongering have impacted public support for wind energy. Despite this, wind power in Texas continues to grow, surpassing coal in the state's electricity balance in 2020 and accounting for 28.6% of Texas energy generation in 2023, second only to natural gas.
Texas has the capacity to generate 18,500 megawatts hours of electricity through wind energy and expects to add another 5,000 megawatts from facilities under construction. The state has set ambitious goals for renewable energy, such as the Texas Renewable Portfolio Standard, which mandated the creation of 2,000 MW of new renewable energy by 2009 and set a target of 10,000 MW by 2025, achieved 15 years early in 2010.
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Maine's increase in rates
Hawaii currently holds the highest electric rates in the US at 41.03 cents per kilowatt-hour (kWh). On the other end, Idaho has the lowest average electricity rate at 11.88 cents/kWh.
Maine has experienced a significant increase in its electricity rates in recent years, with the state seeing the third-fastest rate growth in the US between 2014 and 2024. During this period, the average retail price of electricity in Maine rose from 12.65 cents/kWh to 19.62 cents/kWh, representing a 55% increase. This is more than double the national average increase of 24% during the same period.
Several factors have contributed to Maine's rising electricity costs:
- Natural Gas Availability and Pricing: The availability and pricing of natural gas have impacted electricity rates in Maine. As natural gas prices fluctuate, it can affect the overall cost of energy production and supply.
- Storm Recovery Costs: Maine has incurred significant costs due to storm recovery, especially during the harsh winter of 2023-2024. The cost of restoring power and fixing storm damage has increased substantially over the years, impacting electricity rates.
- Renewable Energy Incentives: Maine has implemented a generous solar incentive program as part of its clean electricity goals. While this promotes the use of renewable energy, it has also contributed to rising electricity rates as the state transitions away from fossil fuels.
- Infrastructure Costs: Maine, along with other New England states, faces higher electricity costs due to infrastructure-related expenses. This includes the cost of maintaining and upgrading power grids, transmission lines, and other electrical equipment.
- Limited Energy Supplies and Production: The region's over-reliance on fossil fuels has made it vulnerable to price volatility in the global energy markets. As fossil fuel prices fluctuate, it can drive up electricity rates.
- High Demand and Cost of Living: As a high population density state, Maine experiences high demand for energy. Additionally, the state has a high cost of living, which can contribute to higher electricity rates.
To mitigate the impact of rising electricity rates, Maine has been investing in renewable energy sources, such as solar power. The state recognizes the need to reduce its dependence on fossil fuels and stabilize energy prices. By promoting renewable energy, Maine aims to provide stable, low-cost, and homegrown energy options that are less susceptible to global market fluctuations.
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Frequently asked questions
Hawaii has the highest electric rates in the US, with residential rates of 41.03-42.34 cents per kWh and commercial rates of 38.29 cents per kWh.
Hawaii has separate electric grids for each island, meaning one island cannot pull power from another. This lack of interconnection leads to decreased efficiency and higher costs. Fossil fuels, particularly oil, account for 80% of Hawaii's electricity, so the price is influenced by oil prices as well as the cost of transportation and infrastructure.
Idaho has the lowest electricity rates, with an average of 11.88 cents per kWh. North Dakota is also one of the cheapest, with an average of 10.21 cents per kWh.
Many factors influence electricity rates, including access to resources, distribution issues, state regulations, and climate. Fuel costs, such as natural gas, coal, and oil prices, also play a significant role. Demand is another factor, with higher rates in states with high population density and energy demand for cooling or heating.
If you live in a state with Energy Choice or deregulated energy, you can shop around for different suppliers and plans to find a lower rate. You can also check your HVAC system and home insulation to reduce your consumption.
