Average Electric Bills in the U.S.

The average amount Americans pay for their electric bills strongly varies from state to state, time of the year, geographic region, size/type of home and many more factors. According to the U.S. Energy Information Administration, the average monthly residential electric bill for roughly 132.6 million electric customers in the United States was $111.67 in 2017. The U.S. average price for one kilowatt-hour was 12.89 cents or $0.13. The price of electricity and the average electric bill in the U.S. is impacted by a variety of different factors.

Geographical Differences

Geographically, there’s a clear shift from lower to higher average bills from North to South and from the West Coast to the East Coast, with few exceptions.

Generally, in climates with more cooling degree days (CDD), electrical consumption is significantly higher than in climates with more heating degree days (HDD). In cold climates other energy sources are being used for heating, mainly natural gas or fuel oil, in addition to the electrical consumption. At the same time the cooling load is usually lower.

The states with the highest average electric consumption in 2017 are all located throughout the Southeast and South-Central regions with the top three states being Louisiana (1,187 kWh), Tennessee (1,150 kWh) and Alabama (1,136 kWh). The high consumption is driven by air conditioning and the high amount of cooling degree days. The high consumption easily compensates for the lower electricity rates in that region.

The differences from the West coast to the East coast can be explained with the higher electricity rates in the North East and the relatively high number of cooling degree days along the East coast compared to the West Coast. While California has some of the highest residential rates in the U.S., the average electric bill in the state remains low. This is caused by a lower consumption driven by the higher electric rates, sophisticated energy efficiency efforts but also the relatively low number of cooling degree days.

Differences from State to State

On a state level, clear differences can be identified, both for the average electricity consumption and for the average price per kilowatt-hour. While the highest average electricity price can be found – to no surprise – in Hawaii (29.50 cents/kWh in 2017), the highest average consumption is in Louisiana (1,187 kWh in 2017). For the average electric bill this means that Hawaii, even at less than half the Louisiana consumption (506 kWh in HI compared to 1,187 kWh in LA), still pays over 29 percent more for their electricity bill than Louisiana ($149.33 in HI compared to $115.54 in LA).

In 2017, average electricity prices in the United States ranged between 8.66 cents per kilowatt-hour and almost 37 cents per kilowatt-hour from the lowest prices in Washington to the highest in Hawaii. Besides the climate other factors play a role for electricity pricing such as a deregulated market, the proportion of renewable energy sources or, as in the case of Hawaii, the geographical location, where all fossil fuel must be shipped in.

Residential Versus Commercial Bills

On a per kilowatt-hour basis, the average electric bill for homes is typically higher than for large commercial customers. The average U.S. household used 10,399 kWh in 2017, an average of 867 kWh per month while the average commercial customer used 6,141 kWh a month.

Residential customers typically pay higher prices. The average retail price paid by U.S. residential consumers in in October 2018 was 12.87 cents per kilowatt-hour. While commercial consumers paid an average of 10.74 cents per kilowatt-hour and industrial consumers paid an average of only 6.91 cents per kilowatt-hour. The cheaper rates are due to the large amount of electricity purchased and the ability to negotiate better terms in the commercial and industrial sectors.

Average Residential Electricity Bills

While climate affects consumption, power generation sources and market regulation affect pricing. Your electricity bill is also greatly affected by the size, type and age of your home and even by its architecture.

Larger homes typically come with higher electric bills. Over the last decades, homes were getting significantly larger while at the same time households were getting smaller. The bigger square footage requires more heating and cooling and leaves room for more appliances and electronics. Smaller households mean a higher electricity bill per person as less people are “sharing” their bills.

More than the size, the age of your home determines your electricity consumption. Especially in cooling climates where consumption is mainly driven by air conditioning. Newer homes are typically more energy efficient than older homes because they have better insulation and newer appliances, lighting and cooling systems.

Another important factor is the type of home. The highest average electric bills are usually paid in single-family detached homes while townhouses and condos have lower bills. The lowest bills are usually found in apartments. The difference is not only caused by the different sizes but by the nature of the dwelling. An apartment with several shared walls has simply less outside walls than a condo or even a detached house. Cooling (and heating) losses are mainly influenced by the surface area size of outside walls and the number of doors and windows.

Trends

While electricity prices have been going up continuously, the average consumption in kilowatt-hours and with it the average electric bill went down over the past years, according to the U.S. Energy Information Administration. In the first half of 2017 alone, residential electricity prices in the U.S. went up by 3%. At the same time the average residential consumption went down 2.5%. While the weather is the most important factor for the fluctuation in consumption, long-term trends clearly show that consumption goes down when prices go up.

The price of electricity drives consumption for the most part. Not surprisingly, Hawaii, the state with the highest average electricity prices, has the lowest consumption in the nation (506 kWh in 2017). However, electric utility customers in Hawaii benefit from a mild climate on the islands that contributed to the state having the lowest residential sector energy consumption. Even as the average price per kilowatt-hour went down, from 36.98 cents per kilowatt-hour in 2015 to 29.50 cents per kilowatt-hour in 2017. If you want to know more about home utilities and deregulated energy, check out our guide now!