Energy guide

Understanding electricity rates

What the numbers mean, how your bill is calculated, and how your state compares.

U.S. Electricity Rates, Scale, Spread, and Drivers

The U.S. Energy Information Administration (EIA) collects retail electricity prices from more than 3,000 electric utilities every month and reports them as revenue per kilowatt-hour (¢/kWh) by state and customer class. The national residential average currently sits at roughly 16–17¢/kWh, but the spread between states is extreme: Louisiana, Washington, Idaho, and Utah land under 12¢/kWh, while Hawaii exceeds 40¢/kWh because of its reliance on imported oil-fired generation. California, Massachusetts, and New York cluster between 22¢ and 30¢/kWh driven by a combination of renewable procurement costs, high labor costs, and legacy transmission investment. An average U.S. household consuming roughly 900 kWh per month pays dramatically different monthly bills, under $110 in the cheapest states, over $360 in Hawaii, for the same level of service.

This guide explains what a kilowatt-hour actually is, breaks down the five line items on a typical electricity bill (energy charge, customer charge, delivery/distribution, transmission, and taxes/fees), and explains why residential rates run higher than commercial and industrial rates despite residential customers using the least electricity. It also covers the deregulated-vs-regulated state distinction, in Texas, Pennsylvania, and roughly a dozen other states you can shop for a retail supplier, while the rest of the country operates under a single regulated utility per service territory. Pair this with our per-state pages for current EIA-reported rates in your state.

Source: U.S. Energy Information Administration (EIA) Form 861 and Form 826 · Scope: all 50 U.S. states and DC · Revenue per kWh (includes base rate plus most fees and surcharges) U.S. Energy Information Administration (EIA) Form 861 and Form 826 · Scope: all 50 U.S. states and DC · Revenue per kWh (includes base rate plus most fees and surcharges)

What the numbers say

US residential electricity averages 16.48¢/kWh in 2024, but where you live swings the rate from 11.5¢ to 42.9¢ per kWh.

16.48¢
US residential avg, 2024
11.51¢
cheapest, North Dakota
42.86¢
priciest, Hawaii
3.7×
gap, cheapest to priciest

Your monthly bill = rate × usage + fixed charges. Source: EIA Form-861, residential sector.

US average electricity rate by sector (2024)

Average revenue per kWh, in cents.

Value

What this shows Residential customers pay the most per kWh, roughly double the industrial rate, because they use the least power and are the costliest class to serve.

Source EIA Form-861 As of 2024

How Electricity Is Priced

Your electricity rate is measured in cents per kilowatt-hour (¢/kWh). This is the price you pay for each unit of energy your home consumes. The rate comes from the Energy Information Administration (EIA), which collects pricing data from every electric utility in the country, over 3,000 utilities reporting to the federal government.

The rate you see on RateWatt is the average revenue per kWh, which includes the energy charge plus most fees and surcharges. This gives a more accurate picture of what consumers actually pay than the base rate alone. Browse all state rates to see how your state compares.

What Makes Up Your Bill

An electricity bill has several components beyond the per-kWh rate:

  • Energy charge: The cost of the electricity itself, based on your kWh usage. This is what RateWatt tracks.
  • Customer charge: A fixed monthly fee ($5-$15) that covers meter reading, billing, and customer service regardless of usage.
  • Delivery/distribution charge: Covers the cost of maintaining power lines, transformers, and local grid infrastructure.
  • Transmission charge: Covers the cost of high-voltage transmission from power plants to your local grid.
  • Taxes and fees: State and local taxes, renewable energy surcharges, and regulatory fees.

The breakdown varies by utility, but the per-kWh rate typically represents 50-70% of your total bill. The rest is fixed charges and fees.

Residential vs. Commercial vs. Industrial

RateWatt shows rates for three sectors, each with different pricing dynamics:

  • Residential: The highest per-kWh rate (national average ~16-17¢). Small customers with variable demand.
  • Commercial: Lower rates (~13-14¢) because businesses use more electricity with predictable patterns.
  • Industrial: The lowest rates (~8-9¢). Large-scale users who can negotiate contracts and often receive power at higher voltages (reducing distribution costs).

Check price trends to see how rates have changed over time for each sector.

How to Use This Data

RateWatt's EIA data is useful for several decisions:

  • Relocation: Compare electricity costs between states. A move from Connecticut (22¢/kWh) to Tennessee (12¢/kWh) could save $100+/month for a typical household.
  • Solar evaluation: Higher rates make solar panels more cost-effective. States with 20¢+ rates have the fastest solar payback periods.
  • Business planning: Energy-intensive businesses benefit from locating in low-rate states.
  • Trend awareness: Rate trends help you anticipate future costs.

Start with the state rankings to see the cheapest and most expensive states.

Frequently Asked Questions

What is a kilowatt-hour (kWh)?

A kilowatt-hour is the amount of energy consumed by a 1,000-watt appliance running for one hour. A 100-watt light bulb running for 10 hours uses 1 kWh. The average US household uses about 900 kWh per month. Your electricity rate (cents per kWh) multiplied by your usage (kWh) determines your bill.

What is the average electricity rate in the US?

The national average residential rate is approximately 16-17 cents per kWh, though this varies enormously by state. Hawaii pays the most (over 40 cents/kWh) while states like Louisiana and Washington pay under 12 cents/kWh. RateWatt shows current rates for every state.

Why is my bill higher than rate × usage?

Your electricity bill includes more than just the energy charge. It typically includes a fixed monthly customer charge ($5-$15), delivery/distribution charges, transmission charges, taxes, and various regulatory fees. The per-kWh rate on RateWatt reflects the average total cost per kWh, including most of these components.

What is the difference between residential and commercial rates?

Commercial and industrial customers generally pay lower per-kWh rates than residential customers because they use more electricity (allowing utilities to spread fixed costs) and have more predictable demand patterns. However, commercial customers often pay demand charges based on their peak usage, which residential customers typically don't.

Do electricity rates change seasonally?

Yes. Many utilities charge higher rates during summer months (June-September) when air conditioning drives peak demand. Some offer time-of-use rates that charge more during afternoon peaks and less during off-peak hours. RateWatt tracks annual average rates, which smooth out seasonal variation.

What does "deregulated" electricity mean?

In deregulated states (like Texas, Pennsylvania, and Ohio), consumers can choose their electricity supplier, potentially finding lower rates through competition. In regulated states, a single utility serves each area with rates set by a public utility commission. Deregulation doesn't always mean lower prices, it depends on the market and consumer behavior.

Sources

  • U.S. Energy Information Administration (EIA), Electric Power Monthly
  • EIA, State Electricity Profiles

This content is for informational purposes only and does not constitute financial advice. Contact your utility provider for current rates specific to your account.

Worked example: putting the numbers together

Consider two electricity offers in a 1,000-kWh/month household. Plan A: 8.9¢/kWh + $9 monthly fee + $4.50 distribution rider = $89 + $9 + $4.50 = $102.50/month. Plan B: 11.2¢/kWh flat with no riders = $112/month. Plan A appears 26% cheaper per kWh but is only 8.5% cheaper monthly. If the household drops to 500 kWh in shoulder months (April, October), Plan A becomes $44.50 + $13.50 = $58; Plan B becomes $56, Plan A's advantage shrinks to 3%. If the household summer-peaks at 1,800 kWh (heavy AC), Plan A becomes $160.20 + $13.50 = $173.70; Plan B becomes $201.60, Plan A's advantage widens to 13.8%. Variable-usage households benefit more from per-kWh-optimized plans; flat-usage households benefit from bundled-fee-light plans. (Illustrative offers, not live quotes, your utility's tariff sheet is authoritative.)

An electricity rate is not a price, it is a structure, and the household that wins is the one that matches its load curve to the plan's fee architecture rather than chasing the lowest advertised kWh.

How to use RateWatt to find your best electricity option

Start with how electricity rates are built on this page to grasp the kWh-plus-fees model, then use state-level rate data to benchmark your bill against your state median. The rate-structure guide walks through fixed, tiered, and time-of-use pricing. For state-by-state comparison, the cheapest-states guide and why prices vary guide show why Idaho and Hawaii sit at opposite ends of the rate curve. The renewable cost comparison covers the levelized-cost-of-energy (LCOE) data behind shifting state generation mixes. Every rate we publish comes from EIA Form 861 (utility annual reports) and EIA Electric Power Monthly, the same data utilities file with FERC.

Put this to work

Your rate is only half the story, usage and fixed fees decide the bill.

Rates are EIA state averages, your utility, plan, and usage set your actual bill.

The live rate figures on this page are pulled directly from the EIA database. Broader context and explanatory figures in the guide text come from public EIA and industry reporting, not necessarily this portal's live database. See our editorial standards & corrections policy, the methodology behind these numbers, or report a data error. Data current as of 2026-05-15.