Electricity retail prices in the U.S. 1990-2020

The retail price for electricity in the United States stood at an average of 10.66 U.S. cents per kilowatt hour in 2020. This was an increase compared to the previous year and the highest price in the period of consideration. The U.S. has one of the lowest electricity prices worldwide when compared to other developed countries. As a major producer of primary energy, respective energy prices are lower than in countries which are more reliant on imports or impose higher taxes.

Industry and commercial sectors charged significantly less than households

When Thomas A. Edison developed a system to generate and distribute electricity, he would have known little about the dramatic impact his invention would create on civilization 130 years after the inauguration of the world’s first power station on Pearl Street in Manhattan, New York. In 21st century America, electric power is omnipresent in peoples’ lives, as electricity is powering factories, shops, homes - and even cars. It goes without saying that electricity consumption has to be paid for, and, naturally, people are worried about the size of their electricity bill.

On average, retail electricity prices in the U.S. changed little from 9.90 cents per kilowatt hour in 2011 to 10.66 cents per kilowatt hour in 2019. However, not every sector has been affected equally by said price increase. U.S. electricity prices for industrial and commercial customers actually decreased between 2019 and 2020, while residential customers were charged nearly 20 cents more per kilowatt hour than the year prior.

Reasons for increases in electricity prices

The rising prices are justified by the costs of power production and power grid maintenance. Although the production cost of electricity generated from coal, natural gas and nuclear sources remained relatively flat, the integration of renewable energy sources, investments in smart grid technologies, growing peak demand and power blackouts caused by the vicissitudes of nature continued to trouble the electric utility industry in the recent past. The average U.S. electricity prices per state can also vary widely, with Hawaii residents experiencing some of the highest rates in the country.