Household electricity prices in the U.S. 1975-2021

The average retail price of electricity for households has risen steadily in the United States, reaching a peak of around 13.72 cents per kilowatt hour in 2021. In the United States, electricity prices tend to reflect base overnight costs for power plants, their maintenance, fuel costs, and the operation of power grids.

How electricity rates differ across states

The price of electricity varies widely across states. Hawaii has continuously had one of the highest rates and Washington one of the lowest. In Hawaii, the power sector is largely reliant on petroleum and diesel generators. Crude oil is a comparatively expensive fuel and prices tend to be volatile, driving up overall electricity prices. Meanwhile, there is virtually no fuel used in the generation of hydropower, and the cost of dams is spread over several decades. This keeps electricity prices low in states which use hydropower as the main source of electricity, as is true for Washington. In the U.S., costs of electricity are greatly shaped by the primary power source used per state.

Maintaining the power grid

In addition to primary fuel purchases, the costs required to operate and maintain transmission and distribution systems also impact the prices that a household pays. In 2020, power utilities reported a peak in grid operating expenses, with transmission-related costs reaching 12.9 billion U.S. dollars and 5.5 billion U.S. dollars invested in distribution networks.