Cost of Electricity by State 2024 vs 2023

Electric Rates by State: 2024 vs 2023

The US Energy Information Administration (EIA) is constantly gathering the latest data from the energy industry, including the cost of electricity by state, [cost per kilowatt-hour (kWh)]. The US EIA publishes this data for all segments of the electricity market: residential, commercial, industrial and transportation.

Analyzing energy data from all 50 states takes time. For this reason, the latest energy costs published by the US EIA are normally from 2-3 months ago. Here we review average electricity prices by state in September 2024, which is the latest data available as of December 2024.

The impact on inflation was evident back in 2022, but electric tariffs remained more stable between 2023 and 2024:

• The average electricity rate for US homeowners was 16.27 cents/kWh in September 2023 and 16.83 cents/kWh in September 2024.
• This represents an energy price hike of 3.4% within a 12-month period.
• For comparison, the US Consumer Price Index increased by 2.4% between September 2023 and September 2024.

Electric rates by state are influenced by multiple factors. For example, Texas has below-average electricity rates thanks to the abundance of local energy resources, while states that depend on natural gas imports tend to have higher rates.

If you live in a state with a deregulated electricity market, such as Texas, you have the freedom to choose your electricity provider. Energy providers in deregulated states compete for customers by offering electricity plans with different energy rates and features. In these cases, your electricity price can also vary depending on your chosen provider and plan.

Residential Electricity Cost by State (2024)

The table below compares average electricity cost by state according to the US EIA, ranked from lowest to highest. The table also shows the current status of electricity deregulation in each state:

#	US State	Electricity Deregulation?	Sept 2024 Price (Cents/kWh)	Sept 2023 Price (Cents/kWh)	Increase / Decrease (% Change)
1	Louisiana	No	11.93	11.42	+4.47%
2	Utah	No	12.18	11.85	+2.78%
3	Washington	No	12.42	11.38	+9.14%
4	Idaho	No	12.44	11.53	+7.89%
5	Kentucky	No	12.45	12.61	-1.27%
6	Tennessee	No	12.61	11.78	+7.05%
7	Arkansas	No	12.77	12.69	+0.63%
8	North Dakota	No	12.78	12.83	-0.39%
9	Nebraska	No	13.14	12.32	+6.66%
10	Mississippi	No	13.24	12.85	+3.04%
11	Montana	No	13.48	13.15	+2.51%
12	Georgia	Yes	13.70	13.97	-1.93%
13	Wyoming	No	13.94	12.64	+10.28%
14	Oklahoma	No	14.01	13.03	+7.52%
15	South Dakota	No	14.02	13.24	+5.89%
16	Nevada	No	14.04	16.94	-17.12%
17	Florida	No	14.05	15.48	-9.24%
18	Iowa	No	14.13	14.12	+0.07%
19	Missouri	No	14.78	14.03	+5.35%
20	Kansas	No	14.85	13.20	+12.50%
21	Indiana	No	14.93	14.10	+5.89%
22	Arizona	No	14.95	14.38	+3.96%
23	Texas	Yes	14.96	14.68	+1.91%
24	South Carolina	No	15.12	14.04	+7.69%
25	North Carolina	No	15.16	13.72	+10.50%
26	Oregon	Yes	15.20	13.19	+15.24%
27	Alabama	No	15.35	14.89	+3.09%
28	Virginia	Yes	15.50	14.69	+5.51%
29	New Mexico	No	15.61	14.88	+4.91%
30	Colorado	No	15.70	15.03	+4.46%
31	Ohio	Yes	15.82	15.59	+1.48%
32	West Virginia	No	15.88	14.35	+10.66%
33	Illinois	Yes	15.93	14.70	+8.37%
34	Minnesota	No	16.29	15.44	+5.51%
35	Delaware	Yes	16.69	15.81	+5.57%
36	Wisconsin	No	17.70	17.41	+1.67%
37	Pennsylvania	Yes	17.79	18.02	-1.28%
38	District of Columbia	Yes	18.03	16.29	+10.68%
39	Maryland	Yes	18.38	16.95	+8.44%
40	New Jersey	Yes	19.32	17.97	+7.51%
41	Michigan	Yes	20.00	19.49	+2.62%
42	Vermont	No	22.62	21.21	+6.65%
43	New Hampshire	Yes	24.86	23.24	+6.97%
44	New York	Yes	24.98	23.24	+7.49%
45	Alaska	No	25.70	24.57	+4.60%
46	Maine	Yes	26.39	26.79	-1.49%
47	Rhode Island	Yes	28.56	25.27	+13.02%
48	Massachusetts	Yes	29.17	28.18	+3.51%
49	California	Yes	31.64	30.01	+5.43%
50	Connecticut	Yes	33.01	29.31	+12.62%
51	Hawaii	No	40.75	41.52	-1.85%
	US Average		16.83	16.27	+3.44%

NOTE: This table shows which states have enacted electricity deregulation by law, but implementing retail energy choice is a complex process. In many of the states listed, you can only choose an energy provider in certain regions or under very specific conditions.

As you can see in the table above, there are currently 11 states with an average electricity price above 20 cents per kWh. This includes Alaska, California, Hawaii, Michigan, New York and all six New England states.

• California and Connecticut have average rates above 30 cents/kWh.
• Hawaii has average rates above 40 cents/kWh.
• Texas is currently at 14.96 cents per kWh, 11% below the US average.

The seven states listed below and Washington DC experienced the most drastic increase in electricity prices between September 2023 and 2024. All these states suffered a rate hike of over 10 percent:

• Oregon (+15.24%)
• Rhode Island (+13.02%)
• Connecticut (+12.62%)
• Kansas (+12.50%)
• District of Columbia (+10.68%)
• West Virginia (+10.66%)
• North Carolina (+10.50%)
• Wyoming (+10.28%)

The average electricity price only decreased in eight states between September 2023 and 2024:

• Nevada (-17.12%)
• Florida (-9.24%)
• Georgia (-1.93%)
• Hawaii (-1.85%)
• Maine (-1.49%)
• Pennsylvania (-1.28%)
• Kentucky (-1.27%)
• North Dakota (-0.39%)

Most Expensive and Cheapest Electric Rates in US by State (Residential)

Electricity prices can vary widely depending on the state. For example, residential rates in Connecticut are 177% higher than in Louisiana.

Electricity costs depend on a combination of several factors: state regulations, climate, geography, consumption habits, local energy resources, renewable energy sources, and the power generation mix all come into play.

The following table compares the five states with the highest and lowest residential electricity prices (based on US EIA data from September 2024):

 

Highest Electricity Prices	Lowest Electricity Prices
1) Hawaii = 40.75 cents/kWh 2) Connecticut = 33.01 cents/kWh 3) California = 31.64 cents/kWh 4) Massachusetts = 29.17 cents/kWh 5) Rhode Island = 28.56 cents/kWh	1) Louisiana = 11.93 cents/kWh 2) Utah = 12.18 cents/kWh 3) Washington = 12.42 cents/kWh 4) Idaho = 12.44 cents/kWh 5) Kentucky = 12.45 cents/kWh

Cost of Electricity per kWh by State (2024 – Commercial Electricity)

In general, businesses have access to lower electricity rates than homes. Commercial energy rates also vary by state, as you can see in the table below:

#	US State	Electricity Deregulation?	Sept 2024 Price (Cents/kWh)	Sept 2023 Price (Cents/kWh)	Increase / Decrease (% Change)
1	North Dakota	No	6.95	7.78	-10.67%
2	Texas	Yes	8.93	9.23	-3.25%
3	Virginia	Yes	9.04	8.29	+9.05%
4	Nebraska	No	9.06	9.31	-2.69%
5	Idaho	No	9.54	8.99	+6.12%
6	Utah	No	9.79	9.22	+6.18%
7	Wyoming	No	9.80	8.69	+12.77%
8	Nevada	No	10.07	13.04	-22.78%
9	Arkansas	No	10.12	10.35	-2.22%
10	Oklahoma	No	10.17	10.14	+0.30%
11	Louisiana	No	10.43	9.79	+6.54%
12	Washington	No	10.55	9.87	+6.89%
13	Florida	No	10.60	11.89	-10.85%
14	Ohio	Yes	10.62	10.9	-2.57%
15	South Dakota	No	10.75	10.44	+2.97%
16	Iowa	No	10.79	11.24	-4.00%
17	South Carolina	No	10.99	10.52	+4.47%
18	Pennsylvania	Yes	11.00	11.12	-1.08%
19	North Carolina	No	11.04	10.15	+8.77%
20	Oregon	Yes	11.33	10.14	+11.74%
21	Kentucky	No	11.42	11.54	-1.04%
22	Georgia	Yes	11.43	10.53	+8.55%
23	New Mexico	No	11.46	11.37	+0.79%
24	Missouri	No	11.76	11.63	+1.12%
25	Kansas	No	12.03	10.84	+10.98%
26	Delaware	Yes	12.04	11.55	+4.24%
27	Montana	No	12.07	12.22	-1.23%
28	Mississippi	No	12.09	11.92	+1.43%
29	Illinois	Yes	12.31	11.30	+8.94%
30	Tennessee	No	12.32	11.61	+6.12%
31	Arizona	No	12.40	12.13	+2.23%
32	Indiana	No	12.53	11.76	+6.55%
33	West Virginia	No	12.61	10.68	+18.07%
34	Minnesota	No	12.75	12.97	-1.70%
35	Colorado	No	12.88	12.57	+2.47%
36	Wisconsin	No	12.96	13.13	-1.29%
37	Maryland	Yes	13.21	12.41	+6.45%
38	Alabama	No	13.52	12.95	+4.40%
39	Michigan	Yes	13.86	13.23	+4.76%
40	New Jersey	Yes	15.52	14.41	+7.70%
41	District of Columbia	Yes	16.64	16.81	-1.01%
42	Maine	Yes	17.84	16.94	+5.31%
43	Vermont	No	19.19	18.31	+4.81%
44	New Hampshire	Yes	20.02	18.49	+8.27%
45	New York	Yes	20.52	20.17	+1.74%
46	Massachusetts	Yes	20.70	18.71	+10.64%
47	Alaska	No	21.73	21.17	+2.65%
48	Rhode Island	Yes	22.97	19.07	+20.45%
49	Connecticut	Yes	23.53	19.98	+17.77%
50	California	Yes	29.13	27.27	+6.82%
51	Hawaii	No	37.08	36.89	+0.52%
	US Average		13.47	13.07	+3.06%

As you can see, commercial electricity rates are lower than residential rates across the US. There are seven states with average commercial rates below 10 cents/kWh, and eight states with average rates above 20 cents/kWh.

Just like in the residential sector, Texas has commercial energy prices below the US average. Texas has an average commercial rate of 8.93 cents per kWh, while the nationwide average is 13.47 cents/kWh (51% higher). Actually, Texas had the second-lowest commercial rates in the US as of September 2024 — after North Dakota with an average rate of 6.95 cents/kWh.

Between September 2023 and 2024, commercial electricity rates increased the most in the seven states listed below, with a price hike of over 10 percent:

• Rhode Island (+20.45%)
• West Virginia (+18.07%)
• Connecticut (+17.77%)
• Wyoming (+12.77%)
• Oregon (+11.74%)
• Kansas (+10.98%)
• Massachusetts (+10.64%)

On the other hand, 14 states saw their commercial tariffs decrease between September 2023 and 2024. However, only five states had a price reduction of more than three percent:

• Nevada (-22.78%)
• Florida (-10.85%)
• North Dakota (-10.67%)
• Iowa (-4.00%)
• Texas (-3.25%)

California and North Dakota have the highest and lowest commercial rates among the 48 contiguous states, with a 319% difference. Here are the five states with highest and lowest commercial rates overall:

 

Highest Electricity Prices	Lowest Electricity Prices
1) Hawaii = 37.08 cents/kWh 2) California = 29.13 cents/kWh 3) Connecticut = 23.53 cents/kWh 4) Rhode Island = 22.97 cents/kWh 5) Alaska = 21.73 cents/kWh	1) North Dakota = 6.95 cents/kWh 2) Texas = 8.93 cents/kWh 3) Virginia = 9.04 cents/kWh 4) Nebraska = 9.06 cents/kWh 5) Idaho = 9.54 cents/kWh

Cities Within a Single State Can Have Different Electric Rates

In this article, we have covered average electric rates by state, which means you may find electricity plans with higher or lower rates. Consider that electricity prices not only vary across states, but also within the same state due to transmission and distribution costs.

For example, if you compare Texas electricity plans from the same providers in Dallas-Fort Worth (Oncor service territory) and Houston (CenterPoint service territory), you will notice slight differences.

The History of Deregulated Electricity in the United States

For most of their history, electricity companies operated as regulated monopolies, controlling generation, transmission, and distribution. However, the Energy Policy Act of 1992 introduced electricity deregulation, fundamentally transforming the industry and affecting electricity costs across many states:

• Competitive Energy Markets: States gained the option to create competitive markets, allowing private generation companies to produce electricity and sell it through the local power grid
• Energy Retailers: A new class of companies emerged in the electricity sector — energy retailers. These businesses purchase electricity in the wholesale market and resell it to residential and commercial customers.
• Regulated Transmission and Distribution: Transmission and distribution remain as regulated monopolies, with each region served by a single utility company. Deregulating this segment is impractical, since it would require a separate grid for each electricity provider — using a shared grid with regulated delivery fees is more cost-effective.

What Is the Purpose of Deregulated Energy in the United States?

The goal of deregulation is increasing the efficiency of the electricity sector. The optimal combination is achieved as follows:

• Allowing customer choice in the consumption side.
• Creating a competitive market for power generation.
• Leaving only grid infrastructure as a regulated monopoly.

Under this operating scheme, electricity consumers can choose their provider, and a delivery tariff is added to the kilowatt-hour price to cover network costs.

The concept of energy deregulation is not exclusive for electricity, and a similar approach has been implemented for natural gas. There are states where both electricity and gas services are deregulated, and states that have only deregulated one service.

When a state deregulates its electricity sector, traditional electric companies must split into separate businesses. A regulated utility company continues operating the power network, while generation assets and retail sales are managed separately. Deregulation laws forbid utility companies from offering benefits to the generation units previously owned by them, and all power producers must compete under equal conditions.

According to the US Energy Information Administration, competitive electricity sales increased from 11% to 21% between 2005 and 2016, while sales from regulated utility companies decreased from 62% to 52%. This indicates a slow but steady transition from regulated to deregulated utilities.

Which States Have Deregulated Their Electricity Sector?

As of 2024, electricity deregulation has been implemented in Washington D.C. and 18 states: California, Connecticut, Delaware, Georgia, Illinois, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas and Virginia.

It is important to note that deregulation has not been applied with 100% coverage in any state so far. The greatest progress has been achieved in Texas, where 85% of the population can choose electricity providers.

Is Electricity More Expensive in Deregulated States?

As of September 2024, the average cost of electricity was 21.05 cents/kWh in deregulated states and 15.59 cents/kWh in regulated states. This can give the impression that deregulation makes electricity more expensive, but researchers from Cornell University have reached the opposite conclusion:

• Electricity prices were already higher in many states that adopted deregulation. In other words, expensive electricity has been a reason to deregulate, not a consequence.
• In recent years, the price volatility of natural gas has been the main cause of electricity price fluctuations in the US.
• The transition from a regulated to a deregulated power sector comes with many costs, and price reductions do not occur immediately.
• Not all states have the same resources, and this affects electricity prices. States with abundant hydropower or coal-fired generation can achieve lower electricity prices.

Texas Deregulated Electricity

Texas deregulated its electricity sector in 2002, and traditional electric utilities were forced to split into three types of companies with independent roles:

• • Retail Electricity Providers (REP): Sell energy to the end customer in the retail market through electricity plans.
  • Transmission and Distribution Utilities (TDU): Deliver electricity provided by REPs to homes and businesses.
  • Power Generators: Produce electricity that is sold to REPs in the wholesale market.

  Texas generates around 50% of its electricity from natural gas, and several spikes in natural gas prices since 2002 have limited the potential benefits of deregulation. In spite of this challenge, Texas electricity rates have remained below the US average. As of September 2024, the US EIA reported an average rate of 14.96 cents per kWh for residential consumers in Texas — 11% below the national average of 16.83 cents per kWh.