Residential electricity price growth in the U.S. 2000-2023

Retail residential electricity prices in the U.S. have mostly risen over the last decade. In 2021, prices registered a year-over-year growth of 4.3 percent. Residential prices are projected to rise further, growing by 6.1 percent in 2022, when compared to the previous year.

Drivers of electricity price growth

The price of electricity is partially dependent on the various energy sources used for generation, such as coal, gas, oil, renewable or nuclear. In the U.S., electricity prices are highly connected to natural gas prices. As the commodity is exposed to international markets that pay a higher rate, U.S. prices are also expected to rise, despite a recent growth in supply in recent years (a result of the hydraulic fracturing boom). Demand for electricity is also expected to increase, especially in regions that will likely require more heating or cooling as climate change impacts progress, driving up electricity prices.

Which states pay the most for electricity?

Electricity prices can vary greatly depending on both state and region. Hawaii has the highest electricity prices in the U.S., at roughly 40 U.S. cents per kilowatt-hour as of February 2022, due to the high costs of crude oil used to fuel the state’s electricity. In comparison, Idaho has one of the lowest retail rates. Much of the state’s energy is generated from hydroelectricity, which requires virtually no fuel. In addition, construction costs can be spread out over decades.