Electricity Cost

With the information below in your hip pocket, you can make an informed decision about your electric provider by submitting your zip code in the box. You will be able to compare the providers and plans available in your area, check out their rates and other cost factors, and select the provider and plan that works best for you. And don’t be surprised if you see some big savings as a result of your choice!

Electricity cost per kwh (kilowatt hour) is the standard way of pricing power. Generally speaking, the price you are paying on your electric bills reflects the cost of building, maintaining, and operating power plants and the electricity “grid” (the system of transmission and distribution lines that span the country), as well as the cost of getting power to your door and billing you for it.

Factors that Affect Your Electricity Cost per Kwh

Some of the factors that affect the price of power include:

  • The fuel used to generate electricity (Coal, for example is relatively inexpensive and natural gas is more costly)
  • Types and location of power plants
  • Maintaining and using the grid to deliver electricity contributes to the cost of electricity.
  • Weather conditions (Extreme heat or cold can significantly increase demand)
  • State regulatory structure

Electricity prices are usually highest for residential and commercial consumers. Though customers pay set rates for power, the cost of electricity generation changes minute by minute, impacted by variables that include fluctuations in demand, fuel costs, availability of different generation sources, and plant availability. Electricity prices tend to rise during peak usage months in the summer and winter.

The average retail electricity cost per kwh in the United States in 2010 was 9.88 cents. The average electricity cost per kwh by type of utility customer were:

  • Residential: 11.6¢
  • Transportation: 11.0¢
  • Commercial: 10.3¢
  • Industrial: 6.8¢

Local Variations in Electricity Price

This map shows average electricity cost per kwh by state in 2007.

In 2010, the states with the highest electricity prices were:

  • Hawaii (25.12¢ per kwh)
  • Connecticut (17.39¢ per kwh)
  • New York (16.31¢ per kwh)

Those with the lowest prices in 2010 were:

  • Wyoming (6.20¢ per kwh)
  • Idaho (6.54¢ per kwh)
  • Kentucky (6.75¢ per kwh)

The variation in these prices has a lot to do with the fuel used to generate power. For example, Hawaii generation plants rely on expensive fuel oil, which is why the electricity cost per kwh and residents electric bills are high. At the other end of the cost spectrum, Idaho’s low electricity cost per kwh is primarily due to the availability of low-cost hydroelectric power.

With the wide variation in rates, one obvious (but likely not practical) way to lower electric bills is to relocate to a cheaper state. On the other hand, many of the states with higher electricity cost per kwh may have financial incentive programs; in all states, federal energy tax credits can make building renewable energy systems a useful strategy for lowering electric costs.