Electricity Rates by State

The average residential electricity rate in the United States is 18.05 cents per kilowatt-hour (kWh) as of February 2026, according to the latest data from the U.S. Energy Information Administration (EIA). That represents a 5.4% increase compared with the same period last year, continuing a trend of steady price growth that has pushed household energy costs to their highest level in over a decade.

What does that translate to on your monthly bill? The average American home consumes roughly 886 kWh of electricity per month. At the national average rate, that works out to about $159.93 per month, or approximately $1,919 per year. However, actual bills vary enormously depending on where you live. A household in Louisiana using 886 kWh would pay roughly $110 per month, while the same usage in Hawaii would cost over $353 — more than three times as much.

Geography is the single biggest factor behind these differences. States in the Southeast and Great Plains tend to have the cheapest electricity, thanks to access to abundant natural gas and low-cost coal, combined with less expensive transmission infrastructure. The Pacific Northwest benefits from federally subsidized hydroelectric dams, which is why Idaho (12.51¢) and Washington (14.12¢) consistently rank among the most affordable states. On the other end, New England and island states pay a premium: limited pipeline capacity forces states like Massachusetts and Connecticut to compete for fuel supply during cold winters, while Hawaii imports nearly all of its energy as petroleum by tanker ship.

What homeowners pay per kilowatt-hour varies dramatically by location. States with hydroelectric power (Idaho, Washington) enjoy the lowest rates, while island states like Hawaii pay a premium due to fuel imports.

The 5.4% national increase is not a single story — it's the result of several forces converging at once. Understanding these drivers can help you anticipate where rates are headed and make smarter energy decisions.

Natural gas prices remain the dominant factor. Natural gas fuels roughly 43% of U.S. electricity generation, and wholesale gas prices climbed through late 2025 as export demand (particularly LNG shipments to Europe and Asia) tightened domestic supply. When gas costs more, utilities pass those costs through to ratepayers — often within one to two billing cycles.

Grid modernization and weather hardening are adding billions in infrastructure costs. After major storms and extreme heat events in recent years, utilities across the Sun Belt and Gulf Coast are investing heavily in undergrounding power lines, upgrading substations, and installing battery storage. These capital expenditures are recovered through rate increases approved by state public utility commissions.

Surging electricity demand is a newer factor. The rapid buildout of data centers to power AI workloads, the growing adoption of electric vehicles, and the electrification of home heating are all pushing total U.S. electricity consumption higher for the first time in over a decade. States like Virginia (+4.1%), which hosts the largest concentration of data centers in the world, are feeling this acutely.

Biggest Rate Increases This Year

Not all states are affected equally. The steepest residential rate increases this year were concentrated in states undergoing major infrastructure investment or facing fuel supply constraints:

• California (+8.9%) — wildfire mitigation costs, aggressive renewable mandates, and transmission upgrades pushed rates to 33.75¢/kWh, the highest in the continental U.S.
• Rhode Island (+8.4%) — the state's small grid and reliance on a limited number of gas-fired plants amplifies price swings.
• Maine (+8.1%) — constrained natural gas pipeline capacity into New England continues to drive winter price spikes that elevate annual averages.
• Massachusetts (+7.7%) and New Hampshire (+7.3%) — both face the same New England pipeline bottleneck, compounded by aging grid infrastructure.

Meanwhile, states with diverse generation portfolios and ample fuel access — such as Louisiana (+1.8%), North Dakota (+2.0%), and Idaho (+2.1%) — saw the smallest increases, underscoring how energy source diversity acts as a natural hedge against volatility.

Businesses pay less per kWh because they use power in larger, more predictable quantities. The gap between residential and commercial rates averages 22% nationally.