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2022 Average Electricity Retail Prices

2022 U.S. Average Electricity Retail Prices

Above is the latest version of our annual U.S. electricity price map. Using the most recent full year of data available from the U.S. Energy Information Administration, our map gives insight into what electricity costs across the country. As always, the map shows that there are stark differences from state to state. While the energy mix available within a state will play a large role in state electricity prices, energy-limiting policies in some states act to artificially elevate prices, making the price of electricity much higher for consumers and businesses. See where your state ranks, and compare it to the national average below.

Click here for a printable version of the map . And see the maps from previous years:  2013 ,  2014 ,  2015 ,  2016 ,  2017 ,  2018 ,  2019 ,  2020  and 2021 . 

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Compare Electricity Rates by State (2024 Energy Suppliers)

Here’s a quick overview of electricity rates in the U.S.:

• Current average retail rate of electricity: 15.95 cents/kilowatt-hour (kWh) 1
• Average monthly electric bill: $121.01 2
• Average monthly energy usage: 881 kWh/month 3

Each product and or company featured here has been independently selected by the writer. You can learn more about our review methodology here. If you make a purchase using the links included, we may earn commission.

Feel like you’ve been paying more for electricity than ever before? You’re not imagining things. The average cost of electricity in the U.S. is currently sitting at 15.95 cents per kilowatt-hour, which is up more than two cents compared to 2022.

Whether you’re moving to a new area and looking for power connection or simply shopping for the best electricity rates, EcoWatch is here to help. We’ve narrowed down the top renewable-source electricity providers in America, and by using this tool or clicking the links below, you can compare prices and find the right plan for you.

Comparing Electricity Prices by State

Energy rates vary greatly between states — from 10.37 cents per kilowatt-hour (kWh) in Washington State all the way up to 45.74 cents/kWh in Hawaii. 8

Keep in mind that these figures are just state averages. You might see different electricity prices depending on which area of the state you live in.

Electric rates can fluctuate depending on the following factors:

• Where you live
• Supply and demand
• Weather conditions
• Utility provider

Most utility rates are regulated by your local public utility commission .

Cost of Electricity per kWh by State

The tables below show electricity rates by state as of December 2022. At the time of publication, this is the most recent data published by the U.S. Energy Information Administration (EIA).

Source: U.S. Energy Information Administration. Average monthly bills have been updated to reflect the most updated electricity increase per kilowatt hour.

Constellation Energy

Nationwide Service

EcoWatch rating

Average cost

• Many years of experience
• Great industry reputation
• Award-winning company
• No.1 producer of carbon-free energy in the U.S.
• Makes charitable contributions
• Charges contract cancellation fees
• No prepaid or no-deposit plans

It’s easy to tout Constellation Energy from a sustainability standpoint. Constellation is the top producer of carbon-free energy in the U.S. and offers a 100% renewable energy plan option. 4

Constellation serves residents in Connecticut, Delaware, Georgia, Idaho, Illinois, Kentucky, Massachusetts, Maryland, Michigan, Nevada, New Jersey, Ohio, Pennsylvania, Texas, Virginia and Washington, D.C.

Constellation also offers unique incentives to its customers, like a 12-month plan that offers protection for two AC units and HVAC diagnostics. Under this plan, you’ll get a $35 bill credit if you use more than 1,000 kWh per month and an extra $15 credit if you use more than 2,000 kWh per month.

On top of that, Constellation Energy has many years of experience and has maintained an excellent reputation, which isn’t easy for electricity providers to do. The company currently has an A+ rating with the Better Business Bureau (BBB).

Unfortunately, there are some unfavorable sides to choosing Constellation Energy. According to its electricity facts label (EFL), it only offers 20.2% renewable energy content in some areas. 5 Constellation also charges contract cancellation fees (most electricity providers do) and doesn’t offer prepaid or no-deposit plan options.

Ecowatch rating

Facts and Figures: Constellation Energy

Green mountain energy.

• Green-e certified plans
• Wide variety of contract term options
• Low number of customer complaints
• No satisfaction guarantee

Of all the sustainable electricity providers, Green Mountain Energy seems to be the greenest of the green. The majority of its electricity plans are 100% powered by solar or other renewable energy sources, and the company operates with a zero-carbon footprint.

Additionally, Green Mountain Energy offers Green-e® certified plans. Green-e® is a certification for renewable energy that meets the highest standards in North America.

Green Mountain was founded in 1997, making it the longest-serving renewable energy retailer. Its Local Solar plan allows you to tap into its 100% solar energy plan by sourcing electricity from solar parks in your area.

Unfortunately, there are some things we don’t love about Green Mountain Energy. While the company has an A+ BBB rating, it is not BBB accredited. Other downsides to Green Mountain include contract cancellation fees, lack of prepaid and no-deposit plans, and no satisfaction guarantees.

Facts and Figures: Green Mountain Energy

Verde Energy

Regional Service

• No early termination fees
• History of issues with misleading marketing
• No prepaid plans

Verde Energy USA is based in Texas, but it also serves residents in Connecticut, Massachusetts, New Jersey, New York, Ohio and Pennsylvania.

While most renewable energy providers tend to be on the more expensive side, Verde offers comparatively low prices — typically near or below the statewide averages when compared per kWh.

We like that Verde Energy’s mission is to provide clean power to all customers instead of simply offering a few “green” plans among its “non-green” ones. Verde provides a few different 100% renewable energy plans that are affordable and accessible. It also doesn’t charge sign-up or cancellation fees, which is huge for an electric company.

Verde Energy has mostly positive reviews from customers online and it maintains an A+ rating with the BBB.

Facts and Figures: Verde Energy

Overview of u.s. energy rates.

As of December 2022, the average cost of electricity in the U.S. is 15.95 cents per kWh, according to data from the U.S. Energy Information Administration (EIA). The agency projects we’ll end 2022 with a 12-month average of 14.9 cents/kWh. 6

That’s a huge difference from recent years.

For some perspective, the average cost of electricity went from 13.2 cents per kWh in 2020 to roughly 14.9 cents in 2022. That might not sound like much, but it’s the difference between an average monthly utility bill rising from roughly $118 to $136 in just three years. And it’s only expected to keep rising in 2024. 7

In an EcoWatch solar energy study , 79% of homeowners surveyed said they’ve been financially stressed over electricity bills.

Fortunately, people living in deregulated energy markets can have a bit more control over how much they spend on electricity because they can choose their own provider. Trying to understand the concept of deregulated energy can be complicated, so we’ve broken down what you need to know in this article.

10 States With the Highest Electricity Rates

Hawaii consistently has the highest electricity prices — the state currently faces a rate of 45.74 cents per kWh. That’s nearly double the cost of the second highest state, New Hampshire, with a rate of 27.47 cents per kWh.

Why is the cost of electricity so high in Hawaii? Well, because fuel to generate the electricity has to be imported. Hawaiian Electric reports that only 38% of local power comes from renewable energy — all other energy sources have to be shipped in. 9

(If you’re reading this from the Islands, it’s definitely worth going solar in Hawaii . Just saying.)

As for other states, prices are mostly dependent on the energy markets. All six New England states rank in the top ten states with the highest electricity rates, and that’s mostly because homes in the northeast are more reliant on natural gas. Natural gas accounts for about 38% of electricity in the U.S., but 53% of electricity in New England. 10

The chart below shows the top ten states with the highest electricity prices as of December 2022:

*California’s electric choice comes through a limited lottery system called DirectAccess.

**Connecticut’s gas choice is partial and limited.

***Maine’s gas choice is only available to industrial and commercial consumers at this time.

10 States With the Lowest Electricity Rates

States with lower electricity rates typically have higher reliance on renewable energy sources or are in closer proximity to energy sources.

For example, Washington State currently has the lowest electricity rates in the country at 10.37 cents per kWh. That’s because nearly 75% of Washington’s electricity comes from hydropower from the many rivers that flow through the state. 11 Washington also offers competitively priced natural gas, delivered from nearby British Columbia and Alberta, Canada, but its residents also consume less natural gas than those in most states. 12

Idaho and Iowa are tied for the second lowest electricity rate in the country at 10.76 cents per kWh. More than half of Idaho’s electricity comes from hydropower and more than half of Iowa’s electricity comes from wind power. 13 , 14

Needless to say, it pays to switch to renewable energy alternatives.

What Is Deregulated Energy?

Deregulated energy markets give consumers the power to choose their own electricity supplier, their own natural gas supplier, or both. Lawmakers see this as a way to eliminate regulated energy rates and monopoly providers, creating competition and, theoretically, lowering the price of your energy bill .

Remember, while you can choose your energy supplier in a deregulated market, you cannot choose your energy delivery provider (i.e., your public utility company).

For example, in Houston, most residents will have their electricity delivered by CenterPoint Energy, but they can choose which Houston electricity company will be their energy supplier (i.e., Frontier Utilities, TXU Energy, 4Change Energy, etc.).

If you take a look at the electric rates by state charts above, you may have noticed that states with high electric prices also tend to be the states with deregulated energy markets. So, you may be wondering: is it beneficial to live in an area with deregulated energy?

Let’s explore some of the advantages and disadvantages of deregulated energy markets.

Pros of a Deregulated Energy Market

• You can choose which company you want to supply your electricity
• You can choose to support green energy plans
• Competition can help drive down prices
• Competition can drive up quality of provider service
• There are no monopolies

Cons of a Deregulated Energy Market

• Prices don’t always drop as expected
• There may be added administrative costs on behalf of the company
• Rates can increase to benefit energy companies, not consumers
• There may be less energy supply security, which can disproportionately affect people who live in rural communities
• Private electricity companies may not be as closely watched or regulated

States With Deregulated Energy Markets

As of December 2022, 28 states and Washington D.C. have deregulated energy sectors.

Seventeen states allow residents to choose their own electricity provider. Of those,16 states also allow for the choice of natural gas provider — these are referred to as “fully deregulated” or “completely open market” states.

It’s important to note that even in a state with a deregulated energy market, some cities may not be deregulated. Let’s look at Texas, for example. Residents in Houston and Dallas can choose their own energy supplier, while those living in Austin and San Antonio are paired with the energy provider that has a claim to those cities.

States with deregulated electricity include:

• Connecticut
• Massachusetts
• New Hampshire
• Pennsylvania
• Rhode Island
• Washington D.C.

There are 12 states that allow residents to choose their natural gas provider but not their electricity provider. They include:

• South Dakota
• West Virginia

What to Expect When Moving to a State with Deregulated Energy

Planning to move to an area with deregulated energy? You’ll soon have the power to choose who supplies your energy needs, similar to the way you choose your internet or cell phone provider.

However, unless you’re moving to Texas (more on that below), you don’t have to choose an independent electricity provider. If you don’t shop for a competitive supplier, you’ll still receive electricity from your utility company.

Can You Switch Energy Providers in Deregulated States?

Yes, you can switch electricity providers in deregulated states. Many consumers choose to switch energy providers because they’re seeking better electricity rates or they want to choose a provider that supplies power from renewable sources.

If you’re currently under contract with an energy provider, we recommend sticking out the contract before switching providers to avoid paying early termination fees.

Click here to find electricity plans near you .

Shopping for Texas Electric Rates

If you are moving to a deregulated area in Texas you’ll have a slightly different experience. Unlike other open energy markets, Texas mandates that customers pick their own providers (unless you live in areas like Austin or San Antonio that have regulated markets).

If you’re moving to Texas, we recommend checking out our guide to Texas electricity rates . We review all of the Texas electric suppliers available in the state and rank them based on rates and sustainability profiles.

Top 3 Tips for Finding the Best Electricity Rates in States with Deregulated Energy

If you’re looking for the best energy plan for your needs, there are a few things you need to keep in mind.

The average cost of electricity can vary based on numerous factors. That means you may be given a different electric rate than that of your neighbors, even if you choose the same energy provider.

Here are three tips to finding the best-value electricity plan:

Compare Energy Providers

Don’t just pick the energy provider your neighbor has. Do your research! What’s best for one household may not be what’s best for yours.

You could spend hours looking up each electric provider near you and sifting through their basic power plans, energy rates and electricity facts labels (EFLs). But if that sounds like too much hassle, you can also use this quick and easy tool to be connected with local energy providers near you.

Remember that the cheapest energy provider isn’t necessarily the best energy provider. We’ve found that electricity companies that prioritize renewable energy aren’t always the cheapest option. But the “cheap” companies often have negative reviews for hidden fees or poor customer service.

Bottom line: Even if you get matched with a provider through a service, do your due diligence. Make sure the energy company you choose is reputable and trustworthy before signing the contract.

Choose a Plan That Fits Your Energy Usage

To find the best electricity provider and rates for your needs, you need to first understand your energy needs.

The amount of electricity your household consumes typically will affect the energy rate you pay per kWh. Most retail electricity providers, or REPs, offer tiered plans based on average energy usage.

Tiered-rate energy plans are often called “V-shaped plans” because the rates are more expensive for people who use the least and most amounts of energy and are lowest for those in the middle.

For example, in a typical tiered plan, customers who use around 500 kWh or 1,500 kWh per month will pay more than those who use around 1,000 kWh per month. According to the EIA, the average U.S. homeowner uses 886 kWh per month. 15

Some companies also offer incentive plans like free nights or weekends. This is a smart plan if you’re a night owl or consume the bulk of your electricity on the weekend. But be aware that these plans typically involve a higher electricity rate during the non-free hours to make up for the loss. That’s why it’s important to get a good grasp of your energy usage before choosing a plan.

Weigh the Contract Lengths

The length of your contract will also play a role in the cost of electricity. As with most services, the longer you commit to one provider, the better deal you’ll get. We’ll discuss the different types of electricity plans in the next section.

A word of caution: Read the fine print and ask questions before you sign. Many contracts come with startup fees as well as cancellation fees for early termination. And while some electricity providers advertise a $10 cancellation fee, the fine print may read that it’s really $10 per month left on the contract .

5 Types of Energy Plans in Deregulated Markets

Most electric companies have a few plan options for customers to choose from. Here’s an overview of the different types offered by most companies, as well as their advantages and disadvantages, so you can pick what’s best for your household.

Fixed-Rate Plans

Just as it sounds, a fixed-rate plan allows you to secure a rate that will stay the same throughout the entire duration of your contract.

Note that “fixed rate” does not mean that your electric bill will be exactly the same every month. Instead, it means the rate you pay per kWh of electricity won’t change. So, your bills will still be higher during months you use more electricity.

Variable-Rate Plans

If you prefer paying month to month instead of being locked into a length-based contract, you may consider a variable-rate electric plan. Variable rate means — you guessed it — the price you pay is based on variables in the energy market. The price per kWh will increase or decrease depending on supply and demand.

No-Deposit and Prepaid Energy Plans

Many power plans require a deposit upon signing a contract to protect the REP from losses should a customer be unable to pay their energy bill. However, certain companies will offer a no-deposit electricity plan option so long as a customer passes a credit check.

If the customer doesn’t have a high enough credit score for a no-deposit plan, they can still avoid paying a deposit by opting for a prepaid, or “pay-as-you-go,” electricity plan.

With a prepaid plan, the customer pays in advance for a set amount of electricity, then can track their electricity usage online and reload the account when it runs low. However, rates are not fixed in a prepaid plan, so it can be harder to plan out expenses.

Green Energy Plans

Green energy plans are those that supply electricity from renewable energy sources, like wind, hydro or solar energy.

Some REPs may have Green-e® verification or a similar certification to ensure that the electricity is responsibly generated, transmitted and distributed. Non-green energy plans will often include a percentage of their total energy from renewable sources, usually ranging from 6-25%.

Most green energy REPs will still offer variable- and fixed-rate plan options — the main difference is where the energy comes from.

Business Energy Plans

Not all REPs provide residential electricity. If you need an energy supplier for your business, you’ll want to look for a provider that offers business energy rates. Business energy plans may also be needed for industrial and government buildings, as well as schools and churches.

Most business energy plans come in variable- or fixed-rate options. Commercial electricity rates also tend to be cheaper than residential ones.

Best Electricity Companies and Providers in America

There are thousands of energy providers across the country, some serving multiple states. Here at EcoWatch, we strive for a healthier planet and encourage our readers to live more sustainably when feasible.

So we’ve chosen to highlight some of the best electric companies that offer 100% renewable energy options. You can click here to start comparing rates from these providers and more.

Rates will vary depending on where you live.

What to Look For When Choosing an Electricity Provider

Whether you’ve just moved to a deregulated energy market or you’re looking to save money by switching companies, here are five main things you should look out for when choosing an electricity provider:

• Types of plans offered: Not every REP will offer fixed-rate, variable and no-deposit energy plans. If you’re looking for cheap electricity rates, check to see if a company offers “saver” plans or monthly bill credits or incentives that can lower your rates.
• Where the energy is coming from: We recommend companies that offer 100% renewable plans from solar or wind energy. If the company does not specify where its electricity comes from, it’s likely natural gas.
• Electricity rates – and the fine print: Many customers shopping for a new energy provider will be looking for the cheapest electricity rates, but if the prices look too good to be true, be sure to read the fine print. Some companies will offer low rates for short-term contracts with a fine-print clause that eventually turns the plan into a variable-rate or higher-priced option. Be wary of this, as companies with misleading advertising may not have your best interests in mind.
• Company history: In most cases, you’ll want to choose an energy supplier with a proven track record of quality service in your area. You also may want to do some research to find out if there’s a parent company. Some companies that offer renewable energy plans are backed by oil companies like Shell.
• Customer reviews: No one enjoys having to pay for electricity service, and outages can be frustrating no matter your energy supplier. But an excessive number of negative customer reviews is probably a warning sign to steer clear of a company. On the other hand, tons of positive reviews are a good sign that a company is likely honest and accommodating.

Other Popular Providers in America

EcoWatch has chosen to feature providers that align with our mission and, in most cases, offer 100% renewable energy. Here are some of the other electricity providers that may or may not hit that goal but that are popular options:

*Rates are subject to change and will vary based on your utility and location. All information is accurate as of December 2022.

FAQ: U.S. Electricity Plans

At EcoWatch, we receive questions every day about the energy market in the U.S. Here are some of the most common questions we see, along with our answers.

Which state has the cheapest energy?

Washington state currently has the lowest electricity rates in the country at 10.37 cents per kWh as of December 2022. This is because the majority of Washington’s electricity comes from hydroelectric power.

Which state has the most expensive energy?

Hawaii has the most expensive energy in the country. The Aloha State faces an average rate of 45.74 cents per kWh as of December 2022. Hawaii consistently has the highest electricity rates because most of the fuel to make its energy has to be imported from the mainland.

What is the best energy provider?

It’s hard to answer this question because the best energy provider for you may be different from the one that’s best for your neighbor. If you’re mainly focused on sustainability, we believe Green Mountain Energy is the greenest energy provider.

What is the average electric bill in the U.S.?

The average electric bill in the U.S. is $121.01 as of December 2022. 16

How can I lower my electricity bill?

If you live in a deregulated energy state, one of the easiest ways to lower your electricity bill is by using this tool to shop around for the best value energy rates.

Looking for other ways to lower your energy bill? Consider adding solar panels , getting an energy efficiency audit or reading some of our energy-saving guides:

• How to Lower Your Energy Bill
• 13 Tips to Conserve Energy and Reduce Bills at Home
• Home Energy Audit Checklist: DIY Vs. Professional
• Solar Calculator: Estimate Your Home Solar Costs & Savings

What is the best electricity plan?

There’s no solid answer to this question, as the best energy plan is dependent on your unique household needs. We recommend looking at the plans offered by Constellation, Clearview Energy and Green Mountain Energy to find a sustainable electricity plan that fits your budget and lifestyle. Or, use this link to get connected to the best energy providers near you.

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Get Ready for Another Energy Price Spike: High Electric Bills

Rates have jumped because of a surge in natural gas prices and could keep rising rapidly for years as utilities invest in electric grids.

By Ivan Penn

Already frustrated and angry about high gasoline prices, many Americans are being hit by rapidly rising electricity bills, compounding inflation’s financial toll on people and businesses.

The national average residential electricity rate was up 8 percent in January from a year earlier, the biggest annual increase in more than a decade. The latest figures, from February , show an almost 4 percent annual rise, reaching the highest level for that month and approaching summer rates, which are generally the most expensive.

In Florida, Hawaii, Illinois and New York, rates are up about 15 percent, according to the Energy Department’s latest figures. Combined with a seasonal increase in the use of electricity as people turn on air-conditioners, the higher rates will leave many people paying a lot more for power this summer than they did last year.

The immediate reason for the jump in electric rates is that the war in Ukraine has driven up the already high cost of natural gas , which is burned to produce about 40 percent of America’s electricity. And supply chain chaos has made routine grid maintenance and upgrades more expensive.

What is particularly worrisome, energy experts said, is that these short-term disruptions could be just the start. They fear that electricity rates will rise at a rapid clip for years because utilities and regulators are realizing they need to harden electric grids against natural disasters linked to climate change like the winter storm that left Texas without power for days last year. Power companies are also spending more on new transmission lines, batteries, wind turbines, solar farms and other gear to reduce greenhouse gas emissions.

The Rising Price of Home Electricity in the U.S.

Year-over-year change in average prices in January each year

U.S. utilities could spend hundreds of billions of dollars in the coming years to repair and upgrade grids .

Almost all of those costs will filter down to monthly electric bills.

“This is an affordability emergency,” said Mark Toney, executive director of The Utility Reform Network, or TURN, which represents ratepayers in California, where rates in February were up 12 percent from a year earlier and utilities are asking regulators to approve further increases. “If you want to control inflation, one of the things you have to control is energy costs.”

Natural gas prices have surged in recent months as U.S. producers have sent more fuel to Europe, which wants to use less Russian gas. Utilities in a few places, like Hawaii and Puerto Rico, rely on some power plants fueled by oil, which has also become much more expensive. The price of coal, which accounts for roughly 20 percent of U.S. electricity, has gone up, too.

The Biden administration has been urging the industry to produce more oil and natural gas, but energy experts say it could take a year or two to significantly increase supplies .

Demand for electricity is also rising because of climate change . The National Weather Service expects this summer to be hotter than average in most of the country. People who can least afford higher bills could feel the pain the most because most moratoriums on power shut-offs during the pandemic have ended. Last month, the White House sought to soften the blow of higher bills by making hundreds of millions of dollars available for home energy assistance.

“Consumers are going to pay the price for this,” said Gordon van Welie, chief executive of ISO New England, the electric grid operator in the Northeast, where electric rates are among the highest in the country. “The reality is we’re going to be dependent on gas for a very long time.”

How Home Electricity Rates Have Changed Around the U.S.

Cents per kilowatt-hour

Even the cost of wind turbines and solar panels, which had been falling for years, has risen recently because of supply chain problems. But analysts said that over the next decade those renewable sources should help tamp down energy costs, reducing the toll that volatile oil, natural gas and coal prices can take on family budgets and business profits.

The problem is that building new wind and solar installations and the related power lines and batteries will have an upfront cost.

“Wind, solar and hydro are exactly what you need,” said Mark Cooper, a senior fellow for economic analysis at the Institute for Energy and the Environment at Vermont Law School. “We should have been much further along in the transition, which we haven’t been.”

Relying more on the grid

Residents of Massachusetts and other New England states have long endured some of the highest electricity rates in the country. Then in January, rates jumped again. And government forecasters say summer temperatures in the Northeast will be far above normal.

Natural gas sells for about two to three times as much as it did two or three years ago, when a glut sent prices tumbling . New England faces an additional challenge: It does not have enough pipeline capacity to import the fuel from producers like Texas or Pennsylvania.

Some cities and towns in Massachusetts are trying to rely less on gas, including by seeking to ban its use in new buildings. Local and state officials want builders, homeowners and businesses to switch to greener technologies like heat pumps , which operate on electricity, rather than a furnace powered by natural gas or oil. Massachusetts is also encouraging people to buy electric cars to reduce gasoline use.

While those technologies use less energy than furnaces and gasoline cars, they place new demands on the electricity network, forcing utilities to build more wind and solar farms and power lines, Mr. van Welie said. “You’re putting more and more of your eggs in the same basket, which is the grid,” he said.

As utilities spend more, rates will climb further. The national average residential electricity rate in the first two months of the year was nearly 14 cents per kilowatt-hour. In Massachusetts the average exceeded 25 cents in February. Hawaii topped all 50 states at more than 38 cents.

The Energy Information Administration, a federal agency, forecasts that rates a year from now will average about 15 cents a kilowatt-hour, or $150 a month for the typical household that uses 1,000 kilowatt-hours.

Some people find that it can be hard to escape high energy bills, even when they conserve.

Thomas Popik moved to Arlington, Mass., a Boston suburb, from New Hampshire in December after buying a home that uses a heat pump. But Massachusetts’s electricity rates are so much higher than in New Hampshire, where they averaged about 22 cents per kilowatt-hour in February, that his monthly bills are about the same in a more efficient home.

Mr. Popik plans to add solar panels to further reduce his costs and environmental footprint. And if electricity rates continue to climb and service is unreliable during bad weather, he said, he may disconnect from the grid — an approach embraced by some residents of California .

“You’re going to see more and more people doing that kind of thing, especially if rates become unreasonable,” said Mr. Popik, who is the chairman and president of the Foundation for Resilient Societies , a nonprofit group that focuses on critical equipment and services like electricity, fuel, telecommunications and aviation. “Solar, battery, backup generator — under that paradigm, why should I be charged high electricity rates?”

Utility executives said they understood that growing frustration. Mr. van Welie of ISO New England said federal and state officials needed to come up with policies that lowered the cost of energy, including by using renewable energy more efficiently.

But in a highly polarized political system, there are few energy reforms that can win bipartisan support. President Biden’s signature energy and climate proposal has stalled in Congress because the measure has no Republican backing and Democrats have a narrow majority.

“It’s going to require government and regulatory direction, and that’s hard to get here in the U.S.,” Mr. van Welie said.

Renewable energy could help lower costs

Rates in the first two months of the year were lower than a year earlier in fewer than a dozen states. Most were in the Midwest and Northwest — areas that rely extensively on wind or hydroelectric power, which tend not to be affected by the swings of global commodity markets.

In Oregon, for example, electric rates fell almost 1.5 percent in January and less than 1 percent in February, though some companies like Portland General Electric did raise rates modestly. Even so, rates at that utility remain well below the national average. The utility, the largest in the state, gets about 20 percent of its electricity from hydroelectric dams, 13 percent from wind turbines and 2 percent from solar panels.

The utility has also recently installed software to improve its ability to incorporate energy from sources like rooftop solar panels and batteries on a neighborhood-by-neighborhood and business-by-business basis. This gives the company more control and flexibility.

Many electric grid operators and utilities have not invested in such tools and cannot monitor and control small energy systems to choose — the lowest-cost renewables over the course of the day, taking into account whether the sun is shining and wind is blowing.

“We have been focused on renewable energy for over a decade, leveraging technologies to allow us to integrate ever-increasing amounts of renewables at the lowest cost for customers,” Maria M. Pope, the chief executive of Portland General, said in an interview.

In much of the United States, utilities are fighting the growth of rooftop solar. Regulators in California have proposed greatly reducing incentives for residential solar systems , though the measure has stalled because of opposition from the solar industry and homeowners. In Florida, Gov. Ron DeSantis recently vetoed a bill backed by utilities that would have effectively gutted incentives for rooftop panels.

Still, utility executives said they were cognizant that they couldn’t just keep raising rates, especially as more people used the grid to power electric cars and heat pumps.

Overall, the greater reliance on the electric grid will reduce costs, said Richard McMahon, senior vice president energy supply and finance at the Edison Electric Institute, a utility industry group. Electric cars and heat pumps, for example, will require less maintenance, do away with fill-ups at gas pumps and reduce heating bills.

“Customers are going to need to think bigger picture: What’s my total energy costs?” Mr. McMahon said.

The Energy Information Administration expects average electricity rates to fall to about 10.5 cents per kilowatt-hour by 2030 and roughly 10 cents by 2050 because of a greater use of renewable energy.

“This is a race between getting to the future and being stuck in the past,” said Mr. Cooper, the senior fellow at the Vermont Law School. “The future is less expensive.”

An earlier version of a chart with this article misstated the average price of electricity by state. The average cost is calculated in cents per kilowatt-hour, not dollars per kilowatt-hour.

How we handle corrections

Ivan Penn is a Los Angeles-based reporter covering alternative energy. Before coming to The Times in 2018 he covered utility and energy issues at The Tampa Bay Times and The Los Angeles Times. More about Ivan Penn

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Electricity Rates by State

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• electricity rates by state

The average residential electricity rate in the U.S. is 15.45 cents per kilowatt-hour (kWh)

(State electric prices last updated April 2, 2024)

The April Choose Energy® Rates Report shows you just how much energy costs can vary, using the latest electricity prices from the U.S. Energy Information Administration (EIA) in all 50 states. Information on recent rates and fluctuations may help you understand your electricity bill or decide to change your energy plan . Do you live in a deregulated area and want to sign up for a new energy plan? Enter your ZIP code above for available electricity rates in your area today.

Where you live affects your electricity rate

According to the latest data available from the EIA, the average residential U.S. electricity price in January 2024 was 15.45 cents per kilowatt-hour (kWh). The national average remained the same compared with the previous year.

In January 2024, Nebraska paid the lowest average residential electricity rates in the country – 9.85 cents per kWh. Hawaii paid the highest electricity rate at 44.28 cents per kWh.

Table of Contents

Electricity rates by state, the april 2024 choose energy rates report, residential electricity rates by state, 10 states with the lowest residential electricity rates, 10 states with the highest residential electricity rates, business electric rates by state, understand the energy market, the future of energy, check out real-time energy rates in these locations, need more information.

The average home in the U.S. consumes  899 kilowatt-hours (kWh) of electricity per month . Bills vary by  state and region , as cost per kWh differs, evidenced by the monthly Choose Energy electricity rates by state report. To estimate average monthly energy bills, multiply the average home’s electricity usage (899 kWh) by the cost per kWh in your state for that month.

For example, the average electricity rate in Rhode Island is 31.22 cents per kWh in this month’s report. The state’s average residential energy usage is 535 kWh per month. This amounts to an average bill of approximately $183.89 (31.22 cents x 589 kWh) that month. Find your state in the following table to check the latest average rate (shown in cents per kWh), its rank among other states, and the percentage change from the previous year.

Once again, Hawaii residents paid the highest average electricity rates in the country, with a rate of 44.28 cents/kWh. Hawaii’s average electricity rates decreased by 1.5% since last January. Nebraska paid the lowest residential electricity rates in the nation at 9.85 cents/kWh, 5.3% higher than last year.

Commercial electricity rates through the year

In many deregulated states, the open energy market is not only for residential customers. Businesses also can take advantage of pricing and plans available through an energy supplier. The average business consumes 6,019  kWh of electricity per month and received a monthly electric bill of about $747 in 2022.

Business electricity rates vary greatly by industry and function. Although homes come in all shapes and sizes , businesses have larger variations with diverse needs – from industrial buildings to small businesses. In January, for example, the average business in Idaho paid 8.64 cents per kWh. With this number, we can deduce that, on average, companies in the state paid about $520.04 that month for electricity.

Explore the Choose Energy Business Energy Index for a more in-depth look at commercial and industrial electricity rates.

Due to the volatility of the energy market, energy prices fluctuate throughout the year. From January 2023 to January 2024, Oregon experienced a 15% increase, the largest increase in residential electricity prices in the United States. Meanwhile, New Hampshire experienced the largest decrease, with rates dropping -21%.

Changes in electricity prices may seem random, but there are a few primary factors that determine how much you pay. These factors are:

• What time you use energy: Some energy suppliers offer plans with time-of-use discounts, such as free energy supply from 9 p.m. to 6 a.m.
• What month you use it: In warmer states, summer rates can be higher than winter rates due to higher energy demand for cooling.
• Where you live: Energy supply rates change from state to state and even among utility areas in the same state, regardless of whether the state has energy choice.

Energy comes from many sources, including coal, natural gas, nuclear power, and renewables. As nonrenewable sources such as coal diminish, the need for renewable energy sources grows. Some states satisfy the country’s growing renewable energy needs with their production of wind, solar , and hydropower.

• Wind: Texas has the capacity to generate 18,500 megawatts hours of electricity through wind energy – and expects to add another 5,000 megawatts of wind generation capacity from facilities under construction.
• Solar: California’s solar farms and small-scale solar power systems generated 3,883 thousand megawatt-hours in December 2023 – the most of any state in the country.
• Hydroelectric: Washington hydroelectric power produces two-thirds of its net electricity. The largest hydro plant is located at the Grand Coulee Dam in the northern part of the state.

Find out which is the greenest state or learn more about green energy across the country.

The following states and the District of Columbia have deregulated electricity markets, meaning customers can choose the company that provides their electricity from competitive suppliers. Click on the state below to check current electricity rates in your state.

• Connecticut
• Massachusetts
• New Hampshire
• Pennsylvania
• Washington, D.C.

Are you a journalist or researcher writing about this topic who needs to know more about historical rates? Send us details about what you need and we’ll get back to you with an answer and a relevant quote from one of our rate experts. You should also check out the Choose Energy Data Center for more statistics and analysis centering on energy in the U.S.

Topics in the Data Center include the following:

• The cost of fueling your car with gasoline vs. electricity in your state.
• The cost of natural gas in your state.
• Your state’s carbon footprint .
• The sources of electrici t y in your state.
• Solar , wind , and nuclear energy generation by state.
• The cost of solar panels .

• Energy & Environment ›
• U.S. average electricity price forecast 2022-2050

Projected average end-use electricity price in the United States from 2022 to 2050 (in U.S. cents per kilowatt-hour)

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average of all sectors. In 2022 U.S. dollars.,br>*Forecast from this year onward.

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Compare Small Business Energy Prices

2024 Business Electricity Price Index Statistics

The table below lists quarter by quarter business electricity rates (in pence per kWh) from Q1 2004 to Q3 2023 (excluding CCL). Here are the a few key statistics:

• Since 2004 average business electricity prices have increased 663% from 3.72p/kWh to 28.40 p/kWh
• The annual price increase from Q3 2022 to Q3 2023 was 32% YoY from 21.52p/kWh to 28.40p/kWh
• Very Large business energy customers have seen the biggest increase in rates from 2004 to 2023 at 730%!
• Medium business energy customers saw the largest increase in the last 12 months at 51%
• Business electricity rates are 28X higher than they were in 1970.

Quarterly Business Electricity Prices (Excluding CCL)

Note business elasticity prices listed above are in pence per kWh. And come from Gov.uk

Quarterly Business Electricity Price Chart (Excluding CCL)

Average Annual Business Electricity Prices (Excluding CCL)

Annual consumption bands for electricity.

The table below shows how business energy costumers are defined based on annual electricity consumption.

Notes: The average price for each size of consumer is obtained by dividing the total quantity of purchases, for each fuel, into their total value. Prices shown are fully delivered prices, including all elements except VAT. The average electricity price from Q1 2007 includes the new Extra Large sizeband, introducing a discontinuity with the averages for previous quarters.

Historic & Current CCL Rates for Electricity

The Climate Change Levy (CCL) came into effect in April 2001. The CCL rates for electricity and gas from 2001 are shown in table below. More information is available on the HM Revenue and Customs website .

Quarterly Business Electricity Prices (Including CCL)

Quarterly business electricity price chart (including ccl).

Average Annual Business Electricity Prices (Including CCL)

Historic business electricity index.

The table below lists the annual price index of electricity sales to industrial consumers (excluding VAT) going all the way back to 1970. Q1 2010=100.

Source Gov.UK

Sources & Methodology

Note the data above all comes from GOV.UK. They state the following:

Data in these tables shows quarterly and annual fuel prices for non-domestic consumers in the UK. Data is shown excluding and including the Climate Change Levy (CCL) in current (cash) terms. Quarterly and annual data back to 2004 are presented. Data sources: Quarterly Energy Prices Publication (opens in a new window) Prices of fuels purchased by non-domestic consumers website (opens in a new window) Industrial price statistics data sources and methodologies (opens in a new window) Revision policy and standards for official statistics (opens in a new window) Digest of United Kingdom Energy Statistics (DUKES): glossary and acronyms (opens in a new window)

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Where Were the Highest and Lowest Electricity Prices in 2023?

U.S. electricity prices vary across the nation in 2023, with the highest rates in the Northeast and California.

2023 Electric Prices Factsheet

April 15, 2024

Each year, the Chamber compiles data on electricity prices across the nation to illustrate the varying rates of electricity. Typically, the Northeast and West Coast are at the high end of the pricing spectrum while the middle of the country enjoys lower rates.

The 2023 version of our electricity price map again utilizes the streamlined “heat-map” theme we unveiled in recent years. This shading format readily identifies the states with lower electricity prices while highlighting those where residents are paying more to power their homes and run their businesses. Our printable state price page groups all fifty states and the District of Columbia according to their respective price ranges. The states with competitive (i.e. lower) retail electricity prices are grouped toward the left, while the states where individuals and businesses are more likely struggling to pay their power bills appear toward the right.

Learn More:

Chamber Analysis Shows Continued Rise in U.S. Electricity Prices

2023 Average U.S. Electricity Prices*

The national average is 12.72 cents per kilowatt hour, connecticut.

• 24.21 Connecticut's average price per kilowatt hour
• Residential: 29.86
• Commercial: 19.98
• Industrial: 15.59
• Transportation: 19.31
• 20.95 Maine's average price per kilowatt hour
• Residential: 27.46
• Commercial: 17.92
• Industrial: 12.43
• Transportation: --

Massachusetts

• 22.97 Massachusetts's average price per kilowatt hour
• Residential: 29.4
• Commercial: 19.28
• Industrial: 17.77
• Transportation: 7.15

New Hampshire

• 22.98 New Hampshire's average price per kilowatt hour
• Residential: 28.31
• Commercial: 20.32
• Industrial: 15.81

Rhode Island

• 21.97 Rhode Island's average price per kilowatt hour
• Residential: 27.98
• Commercial: 17.52
• Industrial: 19.08
• Transportation: 17.29
• 17.52 Vermont's average price per kilowatt hour
• Residential: 20.81
• Commercial: 17.94
• Industrial: 11.34
• 15.41 New Jersey's average price per kilowatt hour
• Residential: 17.73
• Commercial: 14.15
• Industrial: 12.02
• Transportation: 13.05
• 18.32 New York's average price per kilowatt hour
• Residential: 22.25
• Commercial: 18.06
• Industrial: 6.89
• Transportation: 15.7

Pennsylvania

• 12.54 Pennsylvania's average price per kilowatt hour
• Residential: 18.1
• Commercial: 11.25
• Industrial: 7.67
• Transportation: 10.2
• 11.91 Illinois's average price per kilowatt hour
• Residential: 15.82
• Commercial: 11.4
• Industrial: 8.37
• Transportation: 7.04
• 11.5 Indiana's average price per kilowatt hour
• Residential: 14.94
• Commercial: 12.54
• Industrial: 8.24
• Transportation: 12.79
• 13.66 Michigan's average price per kilowatt hour
• Residential: 18.7
• Commercial: 13.34
• Transportation: 13.67
• 11.12 Ohio's average price per kilowatt hour
• Residential: 15.46
• Commercial: 10.76
• Industrial: 7.18
• Transportation: 4.57
• 12.63 Wisconsin's average price per kilowatt hour
• Residential: 16.77
• Commercial: 12.69
• Industrial: 8.6
• Transportation: 17.21
• 9.43 Iowa's average price per kilowatt hour
• Residential: 13.21
• Commercial: 10.42
• Industrial: 6.94
• 11.12 Kansas's average price per kilowatt hour
• Residential: 13.62
• Commercial: 11.11
• Industrial: 8.06
• 12.17 Minnesota's average price per kilowatt hour
• Residential: 14.57
• Commercial: 12.38
• Industrial: 9.19
• Transportation: 12.35
• 11.01 Missouri's average price per kilowatt hour
• Residential: 12.77
• Commercial: 10.2
• Industrial: 7.97
• Transportation: 9.83
• 9.19 Nebraska's average price per kilowatt hour
• Residential: 11.29
• Commercial: 9.2
• Industrial: 7.49

North Dakota

• 7.92 North Dakota's average price per kilowatt hour
• Residential: 10.97
• Commercial: 7.66
• Industrial: 6.98

South Dakota

• 10.42 South Dakota's average price per kilowatt hour
• Residential: 12.25
• Commercial: 10.04
• Industrial: 8.01
• 12.96 Delaware's average price per kilowatt hour
• Residential: 15.75
• Commercial: 11.92
• Industrial: 8.12

District of Columbia

• 16.53 District of Columbia's average price per kilowatt hour
• Residential: 16.35
• Commercial: 17.01
• Industrial: 10.88
• Transportation: 9.94
• 13.51 Florida's average price per kilowatt hour
• Residential: 15.24
• Commercial: 11.83
• Industrial: 9.53
• Transportation: 11.32
• 11.36 Georgia's average price per kilowatt hour
• Residential: 13.73
• Industrial: 6.99
• Transportation: 7.29
• 14.37 Maryland's average price per kilowatt hour
• Residential: 16.59
• Commercial: 12.82
• Industrial: 9.93
• Transportation: 11.23

North Carolina

• 10.86 North Carolina's average price per kilowatt hour
• Residential: 13.24
• Commercial: 9.86
• Industrial: 7.34
• Transportation: 8.87

South Carolina

• 10.76 South Carolina's average price per kilowatt hour
• Residential: 14.1
• Commercial: 10.59
• Industrial: 6.8
• 10.92 Virginia's average price per kilowatt hour
• Residential: 14.34
• Commercial: 9.23
• Industrial: 8.83
• Transportation: 10.42

West Virginia

• 10.27 West Virginia's average price per kilowatt hour
• Residential: 14.07
• Commercial: 11.05
• Industrial: 7.24
• 11.5 Alabama's average price per kilowatt hour
• Residential: 14.58
• Commercial: 13.18
• Industrial: 7.13
• 10.05 Kentucky's average price per kilowatt hour
• Residential: 12.49
• Commercial: 11.49
• Industrial: 6.66

Mississippi

• 11.1 Mississippi's average price per kilowatt hour
• Residential: 13.42
• Commercial: 12.36
• Industrial: 7.11
• 10.79 Tennessee's average price per kilowatt hour
• Residential: 12.27
• Commercial: 11.82
• Industrial: 6.37
• 9.74 Arkansas's average price per kilowatt hour
• Residential: 12.23
• Commercial: 10.34
• Industrial: 6.87
• Transportation: 14.86
• 8.88 Louisiana's average price per kilowatt hour
• Residential: 11.53
• Commercial: 10.3
• Industrial: 5.9
• Transportation: 11
• 9.4 Oklahoma's average price per kilowatt hour
• Residential: 12.28
• Commercial: 9.39
• Industrial: 6.34
• 9.99 Texas's average price per kilowatt hour
• Residential: 14.32
• Commercial: 8.96
• Industrial: 6.63
• Transportation: 7.57
• 12.14 Arizona's average price per kilowatt hour
• Residential: 14.01
• Commercial: 11.74
• Industrial: 7.93
• Transportation: 10.01
• 11.77 Colorado's average price per kilowatt hour
• Commercial: 11.67
• Industrial: 8.56
• Transportation: 9.92
• 9.12 Idaho's average price per kilowatt hour
• Residential: 11.12
• Commercial: 8.82
• Industrial: 7.19
• 10.91 Montana's average price per kilowatt hour
• Residential: 12.43
• Commercial: 12.03
• Industrial: 7.86
• 13.01 Nevada's average price per kilowatt hour
• Residential: 16.67
• Commercial: 11.79
• Industrial: 10.25
• Transportation: 12.75
• 9.67 New Mexico's average price per kilowatt hour
• Residential: 14.16
• Commercial: 10.98
• Industrial: 5.91
• 9.03 Utah's average price per kilowatt hour
• Residential: 11.2
• Commercial: 8.52
• Transportation: 12.29
• 8.34 Wyoming's average price per kilowatt hour
• Residential: 11.45
• Commercial: 9.79
• Industrial: 6.91
• 24.73 California's average price per kilowatt hour
• Residential: 28.92
• Commercial: 23.91
• Industrial: 18.85
• Transportation: 13
• 10.23 Oregon's average price per kilowatt hour
• Residential: 12.68
• Commercial: 10.29
• Industrial: 7.1
• Transportation: 11.41
• 9.61 Washington's average price per kilowatt hour
• Residential: 10.98
• Commercial: 10.08
• Industrial: 6.35
• Transportation: 10.35
• 21.39 Alaska's average price per kilowatt hour
• Residential: 23.89
• Commercial: 20.81
• Industrial: 18.74
• 38.7 Hawaii's average price per kilowatt hour
• Residential: 42.36
• Commercial: 39.38
• Industrial: 35.27

*Prices in cents per kWh.

Source: U.S. energy Information Administration; Electric Power Monthly; February 2024

Explore the electricity retail price maps from previous years:  2013 ,  2014 ,  2015 ,  2016 ,  2017 ,  2018 ,  2019 ,  2020 ,  2021 , and 2022 . 

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Electricity Rates By State

Home / Electricity Rates By State

Updated: 04/10/2024

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States electricityrates.com serves, energy rates by state.

• Average US Electricity Rate, Consumption & Bill

Average Residential Electricity Rate, Bill and Consumption by State

Average residential electricity rates by state, states with the highest electricity rates, states with the lowest electricity rates.

ElectricityRates.com serves the following Energy Choice states . Click on your state below for more information on how you may be able to save by switching electricity providers.

State: Example

Energy type: 67

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• Electricity & Gas
• Connecticut
• Massachusetts
• New Hampshire
• Pennsylvania
• Rhode Island
• Washington, DC

Simple Switch, Big Savings

Compare rates from leading providers and make the switch in only a few minutes.

Energy deregulation aka “Energy Choice” is the process that allows residents and businesses in multiple states to compare and choose plans from a number of retail energy providers. View the map above to see if your state is deregulated.

Electricity and Natural Gas Choice States

Electricity choice states.

• Washington D.C.

Natural Gas Choice States

What you pay for electricity depends on numerous factors including your geographic location, time of year and whether or not you live in a deregulated energy state , also known as having Energy Choice .

Our job is to help you make the most informed decision when it comes to energy and saving on your electricity bill which is why we’ve created this guide to electricity rates by state including average rates, bills, and where you can find the cheapest electricity in the country.

Average US Electricity Rate, Consumption & Bill

According to the most recent data from the United States Energy Information Association (EIA) , here is the United State's average residential electricity rate, consumption and electricity bill as of 2022:

• Average United States Electricity Rate – 15.04 per kWh
• Electricity Consumption Average – 899 kWh per month
• Electricity Bill Average – $135.25 per month

Below you can find the average residential electricity rate, average residential electricity consumption, and the average residential electricity bill for each state in the US.

Average Electricity Rates based on 2022 Average Price of Electricity by State Source: 2022 Average Monthly Bill – Residential

Electricity rates by state for the most recent month with data available including how much rates have gone up or down since this time last year.

Average Electricity Rates based on January 2024 Average Price of Electricity by State Source: EIA Electric Power Monthly: Table 5.6.B. Average Price of Electricity to Ultimate Customers by End-Use Sector

States with the most expensive electricity rates including the state’s average consumption and monthly bill.

Why Are Electricity Rates So High In Certain States?

There are many factors that influence energy costs for a state , including state regulations and climate. But the primary factors that cause high electricity rates include access to resources and distribution issues.

Distribution Challenges for Hawaii

Hawaii, for example, has separate electric grids for each island. This means that one island can't pull power from another island, let alone other states. In the lower 48 states, the grid is largely interconnected, which increases efficiency and lowers cost. Combine this with a heavy reliance on imported petroleum for power generation, and it's easy to see why rates are almost three times higher than the US average.

High Prices for Rural Areas in Alaska

For Alaska, the main cause of higher average electricity rates is grids in rural areas that are not connected to the state's main "Railbelt" electric grid. This causes those rural areas to see 3-5 times higher prices than urban areas in the state.

In Massachusetts , Connecticut and Rhode Island , the cost to transport natural gas, the primary source of electricity generation, is prohibitively high which drives up electricity supply costs.

States with the least expensive electricity rates including the state’s average consumption and monthly bill.

Why Are Electricity Rates So Low In Certain States?

As we said in the previous section, access to resources is important. However, what's also important is how much it costs to generate electricity with those resources.

For example, Washington primarily generates electricity through hydropower, which has minimal operating costs. This is why their electricity rates are the lowest in the nation. The same reasoning applies to Idaho.

There's no clear reasoning why Louisiana, Arkansas and Oklahoma have lower rates than the rest of the nation. One could be that each has access to and uses natural gas to generate electricity, which has become extremely cheap over the years.

FAQs About State Electricity Rates

According to the most recent annual data, the state with the lowest average residential electricity rate is Washington at 9.71¢ per kWh. Washington is followed by Louisiana (9.80¢ per kWh), Arkansas (9.80¢ per kWh), Idaho (9.89¢ per kWh) and Oklahoma (10.21¢ per kWh).

According to the most recent annual data, the state with the highest average residential electricity rate is Hawaii at 32.06¢ per kWh. Hawaii is followed by Alaska (22.92¢ per kWh), Massachusetts (21.92¢ per kWh), Connecticut (21.87¢ per kWh) and Rhode Island (21.73¢ per kWh).

A good electricity rate for you depends on where you live. To see what a good price per kWh is for your area, look at the average electricity rate for your state.

A high electric bill could be caused by many factors. Your first step should be to check your HVAC system and your home insulation since each has a large impact on your consumption. Next, if you live in a state with Energy Choice, check your electricity supply rate and consider switching providers for a lower rate .

The average home in the US uses 29.6 kWh of electricity per day, but how much you should use will vary based on the size of your home, the climate and season you’re in and the electrical appliances you use.

Factors that influence your electric rate include access to natural resources, the cost to generate electricity with those resources, electricity demand, electricity distribution costs, state regulations and the type of electricity customer you are (residential customers usually pay more than businesses).

US electricity and gasoline prices push up energy sector inflation

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We Energies customers would pay about 15% more for electricity by 2026 under new rate proposal. Here's why rates would go up.

We Energies electric customers can expect to continue to see higher bills over the next two years tied to the Milwaukee-based utility's renewable energy construction projects, electric grid enhancements and other initiatives.

The average We Energies residential electric customer would pay $17 to $18 more a month by 2026 under a rate increase proposal filed Friday with state regulators. That's about a 15% increase from the current average bill of $122.08.

That average household would pay about $10 or $11 more a month for electricity next year, followed by an increase of $7 to $8 in 2026.

If the electric rate increases are approved as proposed by the Wisconsin Public Service Commission, We Energies' residential electric customers in 2026 would pay about 25% more for electricity than they did in 2022.

We Energies seeks additional $240 million from ratepayers in 2025

The utility's rate proposal would have customers across all electric service classes pay an additional $240.7 million in 2025 to fill a gap between the electric utility's current $3.5 billion in annual revenue and its projected expenses, said Bert Garvin, senior vice president for external affairs for WEC Energy Group, We Energies' parent company.

The average customer's monthly electric bill would still remain below the national average of about $145, said Scott Lauber, president and CEO of WEC Energy Group. Lauber said the company, unlike some consumer advocates, prefers to look at the total bill - the amount customers actually pay - rather than the rate they pay per kilowatt hour.

"In the end when we look at bills, we feel very good. Our numbers are right in line with the Midwest," he said.

However, consumer advocates representing from residential customers and large industrial companies, say the proposal needs to be scaled back to protect customers whose electricity costs have risen dramatically in the last two years.

Todd Stuart, executive director of the Wisconsin Industrial Energy Group, urged the PSC to "drastically reduce" We Energies' request.

"Wisconsin's ratepayers simply can't afford additional cost burdens," he said. "Wisconsin's electric rates have been well above the Midwest average for over 20 years and continue to be above the national average. Energy inflation is a real issue in Wisconsin."

Previous rate cases set stage for debate

The projected increase for residential customers is based on the assumption that costs will be distributed using the same formula that the PSC used in setting 2023 and 2024 rates.

The formula resulted in  a 14.4% increase in residential rates over two years , while rates for industrial customers rose less than 10%. 

That allocation of costs is among the contentious issues that PSC commissioners will need to resolve before finalizing rates in late November or early December. Many of those issues revolving around energy affordability, will be carryovers from the most recent rate cases.

"A lot of decisions that were made by the commission two years ago are the kind of issues that are coming back in front of us this time," said Tom Content, executive director of the Wisconsin Citizens Utility Board. "Every case is a chance for the for the PSC to evaluate how much is too much."

Coal plant costs, profit and affordability will be key issues

In addition to the allocation of rates, those issues include:

• Concerns about rising costs and energy affordability for the full range of utility customers, from low-income Milwaukeeans to the largest industrial energy customers.
• Whether We Energies should be allowed to continue to earn a profit on unrecovered costs from coal-powered plants that will be retired beginning this year with the shutdown of two units at Oak Creek. CUB and the Wisconsin Industrial Energy Group are among those who have argued that We Energies should use a refinancing tool, known as securitization , to take the payments still due on pollution controls at coal plants out of the rate equation.
• Whether to continue to chip away at We Energies' profit rate, currently set by the PSC at 9.8%. Commissioners in 2022 reduced the utility's allowed profit on its investments from 10%, favoring incremental change to the 9% rate CUB and others had sought. At the time, commissioners signaled an interest in further reductions.

Turnover at the commission ‒ Chairperson Summer Strand, appointed in March 2023, is the longest serving member ‒ creates uncertainty about where commissioners will land on those and other issues, all of the parties have said.

But that doesn't change the argument that customers need relief after energy costs and company profits have risen faster than inflation, Content said.

"This is why the PSC has this job, and why CUB has to be there as well," he said. "We know WEC has a fiduciary responsibility as a company to their shareholders to the bottom line, and we want to make sure that the regulators and ultimately the company are looking out for the customers, too."

More: When a coal-plant closes: Inside We Energies' Oak Creek Power Plant as it is prepped for shutdown

Proposed increase driven primarily by new construction

Garvin said the primary factors contributing to the increase include:

• Solar energy and other projects previously approved by the Wisconsin Public Service Commission account for 85% of the proposed increase, or $167 million. Those include the Paris and Darien solar farms, which are expected to be completed this year, and the purchase of 100 megawatts of generating capacity from Alliant Energy's West Riverside Energy Center near Beloit. Projects that have been announced, such as a proposed natural gas plant in Oak Creek, do not factor into electric rates until they are complete.
• Storm recovery costs and investments in electric grid resiliency that include burying power lines and removing dead and dying trees to prevent outages, add up to about $70 million in new costs.
• Expansion of the Low Income Forgiveness Tool, an assistance program for low-income rate payers, is resulting in about $33 million a year in uncollected debt. Over four years, that's resulted in $156 million in costs that the utility is seeking to recoup over the next two years. bout 36,000 customers were enrolled in LIFT at the end of 2023. The program forgives half of a customer's outstanding balance of $300 or more if they participate in a repayment program for 12 months.
• Inflation has increased utilities' construction, materials, supplies and labor costs by double digits since 2022 due to tight supplies and competition among utilities for the resources they need to continue their clean-energy transitions.

"When you look at the general inflation, our general industry, we're trying to do everything we can to be reasonable in our request," Lauber said.

WEC is also seeking $125 million in new revenue from ratepayers for its southeastern Wisconsin gas operations, WEPCO Gas and Wisconsin Gas.

Final We Energies rate decisions will come later this year

The company's rate proposal will be fleshed out in greater detail in filings that are expected to follow within a month. After that, the utility and intervenors in the case like WIEG and CUB will work with the PSC to better understand the rate case and weigh in on it.

Public hearings are typically held in fall, and the PSC decides the case before the end of the year.

Stuart acknowledges that We Energies has "had a really massive capital expansion plan over the last couple of years and there's just no free lunch," but he believes the rate setting process will lead to some savings for customers.

He and Content both think the process could eventually lead to a settlement with the company, even though the previous commission rejected such an agreement in 2022.

"It may be that the best path to resolving the dead coal plant issue is through that, but we're not sure," Content said. "The PSC has sent signals that they want utilities to really think hard about offering more savings to customers from retiring these coal plants and in light of the fact that they're got billions and billions of dollars of spending plans that they are going to make money under in the years ahead."

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