⚡ Electricity rates by state (2027)

An electricity bill looks simple — a rate, a usage number, a total — but it's actually two separate products bundled into one invoice: the energy itself, and the infrastructure that delivers it. Understanding that split explains almost everything about why bills vary by state, why some households can shop for a better deal and others can't, and where the real savings opportunities actually live.

How a bill is actually built

At its core, a residential bill is: price per kilowatt-hour × kilowatt-hours used, plus fixed charges. But each of those pieces breaks down further.

• Volumetric energy charge. This is the ¢/kWh rate, and it usually covers two things bundled together: the cost of generating or purchasing the power (the "supply" or "generation" charge) and the cost of moving it over transmission and distribution lines (the "delivery" charge). In regulated states these appear as one blended rate; in deregulated states, suppliers price the generation piece separately from the utility's fixed delivery rate.
• Fixed monthly charges. A flat customer or service charge — typically $8 to $25 — covers metering, billing, and grid connection regardless of how much you use. This is why a vacant home still gets a bill.
• Riders and adjustments. Fuel cost adjustments, renewable energy surcharges, storm-recovery charges, and low-income assistance fees show up as smaller line items. They're usually a few percent of the total but can shift month to month with fuel prices.
• Taxes. State and local taxes apply on top, and vary by jurisdiction.

For most households, the volumetric energy charge dominates — typically 80-90% of the bill — which is why usage habits and rate shopping matter more than trying to negotiate the fixed fee.

What drives regional price differences

The price per kWh you're quoted reflects the underlying cost of running that state's grid, not a marketing decision. The biggest factors, roughly in order:

• Fuel and generation mix. Natural gas price swings ripple directly into electricity prices in gas-heavy grids. States with abundant hydro (Pacific Northwest) or a fully depreciated nuclear fleet tend to run structurally cheaper.
• Grid density and geography. Building and maintaining transmission lines across a sparsely populated state, or across island/peninsula geography like Hawaii or parts of New England, costs more per customer than serving a dense metro grid.
• Capacity constraints. Regions where demand has grown faster than transmission and generation capacity pay a premium — this is a real factor in parts of New England and California.
• Weather-driven volatility. States exposed to extreme winter cold snaps or summer heat waves see wholesale price spikes that eventually work into retail rates, especially where utilities pass through fuel costs directly.

Regulated vs. deregulated markets — and whether you can switch suppliers

About a third of states have deregulated their electricity generation market: the wires stay a regulated monopoly (there's only one practical way to run poles and lines to your house), but you can choose which company sells you the electricity itself. Texas, Ohio, Pennsylvania, Illinois, New York, and several others allow this.

In a deregulated state, shopping suppliers is often the fastest, lowest-effort savings move available — no behavior change, no upfront cost. The catch is that plans vary enormously: fixed-rate vs. variable-rate, contract length, early-termination fees, and "teaser" rates that jump after an introductory period. Read the actual rate disclosure, not just the headline number, and favor fixed-rate contracts unless you're confident you'll track and switch again before a variable rate resets.

In regulated states, there's one utility and one commission-approved rate — no shopping, but also no risk of getting steered into a bad variable-rate plan. Your main lever there is usage and, where offered, rate plan selection (see below), not supplier selection.

Time-of-use rates: same electricity, different price by the hour

A growing number of utilities — regulated and deregulated alike — offer time-of-use (TOU) pricing, where the price per kWh changes by time of day, typically cheaper overnight and more expensive during a late-afternoon/early-evening peak window. Some utilities have made TOU the default rate structure, particularly in states with high solar penetration, where midday power is abundant and evening demand is expensive to meet.

TOU only saves money if you can actually shift usage into the cheap window. Good candidates: EV charging, dishwashers and laundry on a delay cycle, and pre-cooling or pre-heating a home before the peak window starts. Bad candidates: anything that has to run when it has to run, like cooking dinner. Before opting into TOU, add up how much of your usage is genuinely shiftable — if it's under 20%, a flat rate is usually safer.

The biggest loads in a typical home

A handful of categories account for most residential electricity use:

• Heating and cooling (HVAC) — typically the largest single category, especially in climates with long heating or cooling seasons. Electric resistance heat is markedly more expensive to run than a heat pump for the same comfort.
• Water heating — often the second-largest load, particularly with electric resistance tank heaters; heat pump water heaters cut this substantially.
• EV charging — for EV-owning households, charging can rival or exceed HVAC as the largest single load, which is exactly why EV owners are the group with the most to gain from TOU rates or off-peak charging schedules.
• Refrigeration, laundry, and electronics — individually smaller, but constant. Older refrigerators and standby ("phantom") loads from chargers and electronics add up over a full year even though no single device looks significant on its own.

Concrete ways to lower usage and rate — not just one or the other

Because the bill has two independent levers, the biggest wins usually combine both:

• Address HVAC first (thermostat setbacks, sealing, maintenance) since it's the largest usage category in most homes.
• Check whether your state is deregulated and, if so, compare current supplier offers — this changes the rate with no usage change required.
• If your utility offers TOU and you have genuinely shiftable load (EV, laundry, dishwasher), opt in and shift deliberately.
• Target water heating and phantom loads next — smaller than HVAC individually but consistent, low-effort savings.

For a longer, ranked list of specific tactics, see our guides. For state-by-state rate and bill estimates, start from the homepage.