Where are the cheap electricity rates in the U.S.?

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By Arthur Murray
For business

(Sept. 11, 2020)

Residential electricity rates and bills differ from state to state.

Oleh Slepchenko/Shutterstock

Many Americans are shocked each month when they open that monthly letter from their utility hoping to see cheap electricity rates – and bills. But for a select few, it doesn’t happen.

According to the ChooseEnergy.com September Rate Report, the average residential electricity rate in the U.S. is 13.28 cents per kilowatt hour (more on what a kilowatt hour is later). Average monthly residential usage is 914 kilowatt hours (kWh). That puts the average U.S. electricity bill at $121.38.

Those numbers, of course, are all based on national averages, not taking into account location, climate, seasonality, and other factors that can affect bills at the state level. (All rate and usage information is the latest released by the Energy Information Administration.)

States with the cheapest electricity rates and bills

Top 10 states with the lowest rates

State Rate (cents/kWh) State Rate (cents/kWh)
Louisiana 9.50 Kentucky 10.85
Washington 9.92 Utah 10.91
Oklahoma 10.24 Tennessee 10.92
Idaho 10.50 Nevada 11.19
Arkansas 10.67 Mississippi 11.21

Low rates are terrific for households, of course, but there’s another factor tied into those electricity bills – usage. Louisiana’s electricity rates are the lowest, as are those in many southern and southwestern states.

But usage in those states is often high. Louisiana’s average monthly usage is the nation’s second-highest – only 1 kWh per month behind Tennessee.

Top 10 states for lowest average usage

State Usage State Usage
Hawaii 518 Rhode Island 589
California 546 New York 604
Vermont 560 Massachusetts 607
Alaska 572 New Hampshire 621
Maine 572 New Mexico 639

What’s a kilowatt hour?

A kilowatt hour is a way to measure how much electricity you use. The actual definition is complicated. But here are some things that use a kilowatt hour to run (roughly):

  • Heating something in a microwave for two minutes every day for a month.
  • Enjoying light from a 10-watt LED bulb for 100 hours.
  • Watching six hours of TV on an LCD model.

So where are the lowest electricity bills?

Air conditioning and heating a residence take up a major portion of a home’s energy consumption. And while air conditioning is all electricity-based, home heating comes in a number of forms – electricity, fuel oil, natural gas.

That’s why electricity consumption is higher in southern states and electricity bills tend to be higher there as well. As for states where bills are lowest, western states in general fare well.

Top 10 states with the lowest electricity bills

State Bill State Bill
Utah 80.95 Maine 96.73
New Mexico 86.14 Idaho 99.12
Colorado 89.55 Wyoming 99.32
Illinois 94.64 Oregon 101.99
Washington 94.93 Montana 102.00

Which states aren’t getting a break on electricity rates and bills?

Unfortunately, cheap electricity rates aren’t present in every state. Hawaii residents, for example, pay higher rates because most fuels have to be obtained from outside the state.

Top 10 states with the highest electricity rates

State Rate (cents/kWh) State Rate (cents/kWh)
Hawaii 29.03 Vermont 19.67
Alaska 23.85 Rhode Island 19.28
Connecticut 21.73 New York 19.11
Massachusetts 21.01 New Hampshire 19.00
California 19.79 Maine 16.91

As mentioned previously, monthly usage is highest in the South, where nearly every house is air-conditioned.

Top 10 states with the largest monthly usage

State Usage State Usage
Tennessee 1,283 Kentucky 1,166
Louisiana 1,282 Virginia 1,165
Mississippi 1,247 South Carolina 1,159
Alabama 1,236 Arkansas 1,156
Texas 1,176 Georgia 1,142

Finally, that combination of rates and usage means bad news for some residents in some states.

Top 10 states with the largest energy bills

State Bill State Bill
Alabama 159.81 Virginia 144.23
Connecticut 157.33 Missouri 142.43
Hawaii 150.38 Texas 141.00
South Carolina 145.80 Tennessee 140.10
Georgia 145.15 Mississippi 139.79

What to do about electricity bills

Since usage and electricity rates figure into energy bills, lowering both is the best way to reduce what you’re paying each month.

Reducing usage

Some tips to cut your usage:

  • Close blinds in the summer and open them in the winter. The first keeps the house cooler in the summer, meaning less work for the air conditioning. The second allows the sun to warm the home at least a small amount, again reducing reliance on heating sources (including electricity, particularly in the South).
  • Change air filers regularly.
  • Use ceiling fans. In winter, set the blades to run in a clockwise direction. Reverse them during summer.
  • Unplug when you can. Cellphone and other chargers use electricity whenever they’re plugged in to an outlet – even if they’re not actively charging. TVs and computers also use electricity when they’re plugged in – even if they’re turned off. Power strips can make fighting “vampire energy” easier.
  • Wash clothes in cold water.
  • Check and reinforce the seals on your windows and doors so you won’t lose cooler air in the summer and heat in the winter.
  • Close off unused rooms so you’re not heating or cooling them.

Reducing electricity rates

In many states, there’s not much residents can do to reduce the rate they pay for electricity – utilities have a monopoly on service.

But in states with energy deregulation, consumers can choose their electricity provider, though the electricity will still be delivered by a utility company.

Still, the power to choose a provider gives customers an opportunity to lower their electricity supply rates. Among deregulated states are the following:

Connecticut Illinois Maine
Maryland Massachusetts New Hampshire
New Jersey New York Ohio
Pennsylvania Texas