Updated Reviewed by ElectricChoice.com’s Editorial Team
The average U.S. business electricity rate is 14.12¢/kWh (March 2026), ranging from 7.44¢ in North Dakota to 38.79¢ in Hawaii. Commercial rates have risen 33% since 2020, climbing from 10.59¢ to today’s average—with a 5.3% jump in the last year alone (13.41¢ in 2025).
These are real-time commercial electricity plans available in Texas. These rates do not include any delivery charges, demand charges, or any other applicable fees. Last updated March 21, 2026. Enter your zip code to verify these rates and to compare plans in other states.
14.12¢
Commercial Avg
17+DC
Deregulated States
-22%
vs Residential Avg
+5.3%
YoY Change
Map of Commercial Electricity Rates
Average commercial electricity rates in cents per kWh — March 2026. Hover or tap a state to see its business electricity rate. States with diagonal lines have deregulated markets where businesses can shop for a provider.
Rate Categories
Deregulated market
Quick Stats
National Avg14.12¢/kWh
CheapestND — 7.44¢
Most ExpensiveHI — 38.79¢
Commercial Rate
02
Average Commercial Bills
The national average commercial electricity bill is $862/month, ranging from $526 in North Dakota to $2,800 in Hawaii. Estimated bills by business type at 14.12¢/kWh:
Estimated monthly electricity costs by business type at the national average commercial rate
Business Type
Typical Monthly kWh
Est. Monthly Bill
Small office (1,500 sq ft)
1,500 – 2,500
$212 – $353
Retail store
3,000 – 6,000
$424 – $847
Restaurant
4,000 – 8,000
$565 – $1,130
Grocery store
15,000 – 40,000
$2,118 – $5,648
Office building (10,000 sq ft)
10,000 – 20,000
$1,412 – $2,824
Warehouse / distribution
20,000 – 50,000
$2,824 – $7,060
Manufacturing facility
50,000 – 500,000
$7,060 – $70,600
Data center
500,000 – 5,000,000+
$70,600 – $706,000+
Note: These estimates use energy charges only at the national average rate. Your actual bill will also include delivery charges (3–6¢/kWh), demand charges (which can represent 30–70% of a large commercial bill), and applicable taxes. Businesses in deregulated states can often reduce the energy charge portion by 15–30% by shopping among providers. Enter your zip code above or call 1-800-974-3020 to get a quote based on your actual usage.
03
What's on Your Business Electricity Bill?
Commercial electricity bills are more complex than residential ones. Understanding each component gives you leverage to negotiate better rates and control costs.
Energy 50–60%
Delivery 20–25%
Demand 15–20%
Energy supply (shoppable)
Delivery (regulated)
Demand charges
Taxes & fees
Energy Charges (Supply)
50–60% of your bill | Shoppable in deregulated states
The per-kWh rate for the electricity your business actually consumes. In deregulated states, this is the portion you can shop for among competing providers. When you see competitive rates advertised, they usually refer to energy-only charges — delivery fees are always separate.
Delivery Charges (T&D)
Adds 3–6¢/kWh | Regulated & non-negotiable
Your local utility charges for moving electricity through the grid to your building — regardless of which supplier you choose. Set by your state's public utility commission, delivery charges cover poles, wires, substations, and meters.
Demand Charges
30–70% of large commercial bills | Based on peak kW draw
Based on your peak power draw — the highest electricity usage in any 15- or 30-minute window during a billing period, measured in kW. Managing peak demand through load shifting, battery storage, or staggering equipment startups is one of the most effective ways to cut costs.
Load Factor
Higher = better rates | Target 60%+ for custom pricing
Measures how consistently your business uses electricity (total kWh ÷ peak kW × hours). A data center at 85–95% is very efficient; a seasonal retailer at 30–40% is not. Higher load factors make your business more attractive to providers, unlocking lower negotiated rates.
04
Types of Commercial Electricity Plans
Businesses in deregulated markets can choose from several plan structures, each designed for different operational needs and risk tolerances.
Fixed-Rate Plans
Lock in a consistent ¢/kWh rate for a set term — typically 6 to 60 months. Your energy rate stays the same regardless of market fluctuations, providing budget certainty and protection from price spikes.
Best for: Most businesses seeking stability
Variable-Rate Plans
Your rate adjusts monthly (or even hourly) based on wholesale market conditions. You may save during low-demand periods but face significant risk during price surges — summer peaks can drive rates 3–5x higher.
Best for: Risk-tolerant businesses with flexible operations
Block & Index Plans
A hybrid approach: you fix a price for a predetermined "block" of expected monthly usage. Any consumption above the block is priced at the floating wholesale (index) rate. Balances cost certainty with market upside.
Best for: Large enterprises with predictable baseloads
Time-of-Use Plans
Rates vary between peak and off-peak hours — often 30–50% cheaper during nights, weekends, and holidays. Rewards businesses that can shift high-energy operations (manufacturing, EV charging, HVAC pre-cooling) to off-peak windows.
Best for: Businesses with flexible operating schedules
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Frequently Asked Questions
Which state has the cheapest business electricity?
North Dakota has the lowest average commercial rate at 7.44¢/kWh — 47% below the national average. Among deregulated states where businesses can shop for providers, Texas leads at 7.15¢/kWh with energy-only rates from 4.56¢/kWh. Idaho (8.19¢), Nebraska (9.58¢), and Virginia (9.73¢) also rank among the cheapest, though they are regulated markets where businesses cannot choose their electricity supplier.
Can my business choose its electricity provider?
It depends on where you're located. 14 states plus D.C. have fully deregulated electricity markets: Texas, Pennsylvania, Ohio, Illinois, New York, New Jersey, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, Rhode Island, and Washington D.C. Michigan and Virginia offer partial choice. In these areas, businesses can choose from competing retail energy providers. In regulated states, your utility is your only option for electricity supply.
What is a deregulated electricity market?
In a deregulated market, the generation (supply) and delivery of electricity are separated. Your local utility — like Oncor in Texas, PECO in Pennsylvania, or ConEd in New York — still owns the poles, wires, and meters and delivers power to your building. But you choose which Retail Electric Provider (REP) or Energy Service Company (ESCO) supplies the energy and sets your rate. This competition among suppliers drives prices down. Delivery charges remain regulated and are the same regardless of your chosen supplier.
How do demand charges work on a commercial bill?
Demand charges are based on your peak electricity draw — the single highest amount of power your business consumes at any point during a billing cycle, measured in kilowatts (kW) over 15- or 30-minute intervals. The utility charges for the grid capacity needed to serve that peak. Demand charges can represent 30–70% of a commercial bill and are common for businesses using over 20 kW. Managing your peak — through staggering equipment startups, using battery storage, or shifting operations — is one of the most effective ways to reduce your overall electricity cost.
What is load factor and why does it matter?
Load factor measures how consistently your business uses electricity: total kWh consumed ÷ (peak kW demand × hours in billing period). A load factor of 80% means your business uses power steadily (like a data center). A load factor of 30% means you have sharp peaks and low valleys (like a seasonal event venue). Electricity providers prefer high-load-factor customers because they're cheaper to serve — so a higher load factor typically earns you lower per-kWh rates when negotiating custom commercial contracts.
How much does the average U.S. business spend on electricity?
The average U.S. commercial electricity bill is approximately $862 per month based on average commercial consumption of ~6,100 kWh/month at the national average rate of 14.12¢/kWh. Actual bills vary enormously: a small office might pay $150–$400/month, while a large manufacturing facility or data center can see bills of $50,000–$500,000+ monthly. Annual U.S. commercial electricity spending exceeds $250 billion.
How can my business lower its electricity costs?
Start with the highest-impact strategies: 1) If you're in a deregulated state, compare providers — switching alone saves 15–30%. 2) Manage peak demand to reduce demand charges (stagger equipment, use battery storage). 3) Improve your load factor by spreading consumption more evenly. 4) Invest in energy efficiency (LED lighting, HVAC optimization, building envelope improvements). 5) Consider on-site solar or a power purchase agreement (PPA). 6) Check if you qualify for sales tax exemptions (available for manufacturing in many states). 7) Negotiate your contract renewal 60–90 days before expiration to avoid expensive holdover rates.
What's the difference between energy charges and delivery charges?
Energy charges cover the cost of generating the electricity you use — this is the competitive portion in deregulated markets, and what you're shopping for when you compare providers. Delivery charges (also called transmission and distribution or T&D) cover the cost of moving electricity through the grid to your building — poles, wires, substations, and meters. Delivery charges are regulated, fixed, and the same regardless of your provider. Together, they make up your total all-in rate. When comparing plans, make sure you're comparing all-in rates (energy + delivery), not just energy-only rates.
When is the best time to shop for a commercial electricity contract?
The best times are during the shoulder months — spring (March–May) and fall (September–November). Wholesale electricity demand is lower during mild weather, which leads to more competitive rates from providers. Avoid signing new contracts during peak summer (June–August) when heat drives demand and prices to their highest levels. Most importantly, start shopping 60–90 days before your current contract expires — if you miss your renewal window, you'll be rolled onto a month-to-month holdover rate that's often 2–3x your contracted rate.
Why are commercial electricity rates lower than residential?
Businesses pay less per kWh (14.12¢ vs. 18.05¢ nationally) for three main reasons: 1) Higher volume — businesses consume more electricity, reducing per-customer infrastructure and billing costs. 2) More predictable usage — commercial consumption patterns are steadier, which is more efficient for the grid. 3) Higher voltage delivery — many commercial buildings receive power at higher voltages, requiring less step-down transformation. The national commercial rate is 22% lower than residential on average.
Can my business get 100% renewable energy?
Yes, regardless of where you're located. Businesses have multiple pathways: on-site solar (via purchase or Power Purchase Agreement), community solar subscriptions (available in 40+ states), Virtual PPAs (financial contracts with remote renewable projects), green tariff programs through your utility, or Renewable Energy Certificates (RECs) purchased on the open market. Many of these options provide cost savings, not just environmental claims. In deregulated states like Texas, many providers offer competitive 100% renewable plans with little to no price premium.
What is a Power Purchase Agreement (PPA)?
A PPA is a long-term contract (typically 10–25 years) between your business and a renewable energy developer. In a direct PPA, a developer installs solar panels on your property at no upfront cost — you simply buy the electricity at a fixed rate, usually 10–30% below your current utility rate. In a Virtual PPA (VPPA), you contract with a remote wind or solar project; the project sells power to the wholesale grid and you receive Renewable Energy Certificates. VPPAs don't change your physical electricity supply but provide price stability and verifiable sustainability claims. PPAs are the most popular corporate renewable procurement tool in the U.S.
How do I read my commercial electricity bill?
A commercial bill has four main sections: 1) Energy charges — the per-kWh cost of the electricity you consumed (the competitive portion in deregulated markets). 2) Delivery/T&D charges — regulated fees from your utility for transmitting and distributing electricity through the grid. 3) Demand charges — fees based on your peak power draw (kW) during the billing period, common for accounts over 20 kW. 4) Taxes, fees, and riders — state/local taxes, renewable energy surcharges, capacity charges, and regulatory assessments. To find savings, focus first on the energy charge (shop in deregulated markets) and demand charges (reduce peak usage). Delivery charges are fixed and non-negotiable.
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Data Sources & Methodology
About This Data
Commercial electricity rates are sourced from the ElectricChoice.com business electricity marketplace and reflect real-time pricing from participating retail electric providers and energy service companies. Deregulation status reflects current state legislation as of March 2026. Last refresh: .
