Electricity Rates by State (August 2026)

Electricity rates by state

Below you can see average kWh prices and monthly bills by state.

Average residential electricity rates

Average commercial electricity rates

Commercial vs. residential rate differences

As a residential customer, your bill is mostly based on how many kilowatt-hours you consume.

Businesses, however, enjoy advantages you don't have access to. For example, they can negotiate better rates because they use more electricity in a predictable way.

They also face demand charges that you don't see on your bill, which are based on their highest usage spikes.

States with high living costs or limited natural resources typically have higher electricity rates across all customer categories.

Utility company rate structures explained

While you might focus only on the price per kilowatt-hour when checking your electricity bill, you should know that utility rate structures are actually made up of several interconnected parts that work together to calculate your final cost.

Your fixed charges cover the basic infrastructure costs regardless of how much electricity you use. These include your meter, the power lines to your home, and customer service operations.

If you see demand charges on your bill, these reflect your highest power usage points, as the utility company must maintain enough grid capacity to handle everyone's peak usage times.

Supply charges on your bill directly relate to what it actually costs to produce the electricity you're using. These fluctuate with market conditions and fuel prices.

Cheapest states for electricity

If you're looking for budget-friendly electricity, western and midwestern states top the list. States like Utah, Idaho, North Dakota, and Nebraska tend to be affordable for different reasons.

North Dakota and Nebraska leverage local energy production, keeping electricity prices stable. Utah and Wyoming continue the trend with access to coal and renewable sources that contribute to affordability.

Oklahoma's energy market supports competitive pricing, while Washington's extensive hydroelectric infrastructure provides a steady and cost-effective electricity supply.

Cheapest residential states for electricity

Cheapest commercial states for electricity

Most expensive states for electricity

States like Hawaii, Massachusetts, California, and Alaska tend to have some of the most expensive electricity in the nation.

Different factors make these states expensive. In Hawaii, higher bills stem from the island's reliance on expensive imported fuel, while Alaskan residents face similar challenges due to remote distribution networks.

Looking at Northeastern states, customers deal with markets that have limited regional competition. Across all these high-cost regions, you're also paying for the inefficiencies of aging grid infrastructure.

Expensive residential state electricity rates

Expensive commercial state electricity rates

How the largest cities compare

Below you can see how rates compare in 20 of the country's largest cities:

What factors affect the cost of electricity?

Economic factors influence electricity costs through a complex interplay of market dynamics, resource pricing, and structural elements. When you look at your electricity bill, you're seeing the end result of many economic forces working together.

• Fuel costs: Fuel costs play a huge role in what you pay. Natural gas, coal, and oil prices fluctuate in the global market, and these commodities directly affect how much it costs to generate the power you use daily.
• Infrastructure: Every time you turn on a light, you're participating in a system that requires massive infrastructure investments. From new transmission lines to power plant upgrades, investment costs are gradually passed on to you.
• Regulated vs. deregulated: If you live in a deregulated area, you might benefit from price competition between providers, though this can also expose you to price volatility during peak demand. If you aren’t in a deregulated area, you can’t pick your company.
• Current events: External forces affect what you pay, too. International conflicts can disrupt supply chains and cause ripple effects that show up on your bill.

How deregulated energy works

Energy deregulation is the process of opening electricity and natural gas markets to competition. Instead of being controlled by a single utility company, you can choose your energy provider in a deregulated market. This arrangement is designed to promote market competition and price flexibility.

Here’s how it works:

• Utility companies manage the infrastructure like power lines and gas pipelines.
• Energy providers compete to sell electricity and gas to consumers.
• Consumers select an energy supplier based on price, contract terms, and renewable energy options.

States with energy deregulation

Major residential deregulated energy markets include:

• Connecticut electricity plans
• Delaware electricity plans
• Illinois electricity plans
• Maine electricity plans
• Maryland electricity plans
• Massachusetts electricity plans
• Michigan electricity plans
• New Hampshire electricity plans
• New Jersey electricity plans
• New York electricity plans
• Ohio electricity plans
• Pennsylvania electricity plans
• Rhode Island electricity plans
• Texas electricity plans
• Virginia electricity plans

How to choose an energy provider

Compare rates and contract terms to find the best deal for your situation. Look for renewable energy options if sustainability is a priority to you (many providers offer green energy plans). Reading customer reviews can give insight into service quality and hidden fees to watch out for. Finally, make sure to understand cancellation fees to avoid unexpected costs if you decide to switch providers.