National Average Context
The US average residential electricity rate was approximately 16.2 cents per kWh in 2023, according to the EIA. But rates range from under 10 cents in the cheapest states to over 40 cents in Hawaii — making where you live one of the biggest factors in your electricity costs.
Top 10 Cheapest States for Electricity
| State | Avg Rate (¢/kWh) | Primary Reason |
|---|---|---|
| Louisiana | 9.5¢ | Natural gas abundance, low transmission costs |
| Oklahoma | 9.8¢ | Natural gas + some wind power, low regulatory costs |
| Washington | 10.2¢ | Hydro power from Columbia River system |
| Idaho | 10.3¢ | Hydro power, low population density costs |
| Arkansas | 10.4¢ | Natural gas and coal, low cost of living |
| North Dakota | 10.6¢ | Coal and wind power, low transmission costs |
| Wyoming | 10.7¢ | Coal heavy, low state regulation |
| Mississippi | 11.0¢ | Natural gas, low labor costs |
| Montana | 11.2¢ | Hydro power, low population density |
| Nebraska | 11.3¢ | Public power districts, wind energy |
Most Expensive States
| State | Avg Rate (¢/kWh) | Primary Reason |
|---|---|---|
| Hawaii | 43.5¢ | Island isolation, oil-fired generation, high import costs |
| California | 31.6¢ | Heavy renewables mandate, grid upgrades, high labor costs |
| Connecticut | 27.8¢ | Old nuclear plants, grid transmission costs, gas reliance |
| Massachusetts | 25.4¢ | Limited local generation, high demand, offshore wind investment |
| Rhode Island | 24.9¢ | Small state, no local generation, transmission-dependent |
Why Rates Differ So Much
Fuel Mix
States with abundant hydro power (Washington, Oregon, Idaho) or cheap natural gas (Louisiana, Oklahoma) have dramatically lower generation costs. Hawaii, relying heavily on imported oil, pays the most.
Infrastructure and Transmission
States with older, denser grid infrastructure pay more for maintenance and upgrades. New England states pay significant transmission costs to move power from generation centers to consumers.
State Regulation and Policy
States with aggressive renewable energy mandates (California, Massachusetts) incur higher costs during the transition. Public utility commissions that allow utilities to recover more capital costs through rates lead to higher bills.
Deregulation
Deregulated states (Texas, Illinois, Pennsylvania) allow consumer choice of electricity supplier. In theory, this creates competition and lower prices — in practice, results are mixed, and some consumers in deregulated markets pay more if they don't actively shop for better rates.
What This Means for Your Bill
At the same usage level (1,000 kWh/month), a household in Louisiana pays about $95/month, while a household in Hawaii pays about $435/month — a difference of $4,080/year. If you're considering relocating, electricity rates are worth factoring into your cost-of-living calculations, especially if you're purchasing an EV or planning to electrify home heating.