What’s the Typical Monthly Electric Bill in Your State?

When the utility invoice arrives in the mail, you are probably far from excited. Why does it feel like no matter what you do, the house electricity bills just keep getting higher? To answer that question, we need to look at the average electric bills in your area and in the country. Then we will answer the most pressing question – how can you bring the average cost of electricity down?

Factors Affecting the Cost of Electric Bills

What do your monthly electricity costs depend on? There are two major variables affecting your monthly bill – your monthly electricity usage and your electricity rate per kilowatt-hour of electricity you pay for your house. You might be thinking – that is all well and good, but I can’t change how much electricity I spend or the per-unit price that the utility company charges. Actually, you can! Let’s look at how to do both.

Electrical Consumption

Your electricity bills will directly depend on the amount of electricity that you use every month so the first thing you should do is to calculate your average monthly electricity usage. According to the U.S. Energy Information Administration, the average U.S. household consumed approximately 877 kWh per month in 2019 but it can vary from anywhere between 700 and 2000 kWhs. Your energy usage depends on your location, the size of your household and the appliances you have, as well as the way you heat your home. Household electricity heating and air conditioning will dramatically increase your energy usage, for example. 

How can you find out what your electricity usage is? The easiest way is to look at your previous electricity bill which will have your electricity consumption listed. You can also estimate the usage yourself – by multiplying the electricity consumption of each appliance (their nominal power to be found on the manufacturers’ label) with the time the appliance runs. Then, sum the values for all electrical devices in your home and you’ve got your total electricity consumption. 

Modern comfort comes at a price and air conditioners, refrigerators, chargers, and water heaters are the third-largest use of energy in the United States. What’s worse, according to the same report, 35% of residential energy in the US is wasted, rather than used! Hot water, for example, mostly runs down the drain once it’s used, but there are ways to recover this heat loss. 

Furthermore, not having energy-efficient appliances means that you spend more energy than you should. Your energy consumption also rises with the age of your home and worse quality of insulation as your total household energy consumption rises with drafts and pipes that are not insulated. Your energy usage and energy costs can drop significantly if you invest in gas heating and efficient electronic devices and appliances. 

Did you know…

Many modern devices at your home, such as the DVR, computer, laptop are referred to as ‘vampire appliances’ because they continue using energy and cost you money even in the ‘Stand By’ mode. Believe it or not, up to 75% of the average electricity usage of electrical devices comes when they are turned off. This power consumption adds up and can increase your carbon footprint and total energy costs. 

For example, by not turning off your laptop properly (closing it, instead of switching it off with a button), you’re burning through an extra 34 dollars on your annual electricity invoice. Furthermore, your smart TV can add an additional $4 to your energy costs. A rule of thumb is to understand that between 9-15% of your average annual electricity consumption goes towards the appliances on standby mode. 

Consider getting a smart power strip, a device that shuts off electronics that are no longer in use, to avoid steep standby power costs. These strips cost little and are easy to install, but can allow you to turn on and off multiple appliances connected to the strip. This way, you can reduce your household electricity use and reduce your carbon dioxide emissions. A smart thermostat controlling your air conditioning and space heating can save even more energy. 

Residential Electrical Consumption 

Every household pays a different amount on their energy bill. Residentsdiffer and so their habits. While some practice booking every day and using electricity to do so, some cook every few days and use other sources of energy. All these habits affect energy use, especially during winter: in the winter, we spend most time indoors. 

In the last few years, the number of devices in a household rose as well. As the demand for consumer electronics rose, so did the power consumption per capita. This is how we got to the high 877 kWh per month per capita in the US. More people want more control over their devices: being able to control your dishwasher or the temperature of the rooms with your voice used to be a thing of imagination. Today, it is reality, but it comes at a pricey energy tag. 

Changing habits also play a big role. Many people today shower twice a day – a whopping eight showers a day in a nuclear household. This raises the kWh of electricity spent per capita, even if you use the least amount of water, with water-saving showerheads. The extra kilowatts used for powering water heaters influence the power bill. 

Commercial Electrical Consumption

Commercial ventures or businesses consuming more energy than before are not a rare sight. Office building’s temperature is much better controlled and food in restaurants is stored in a much bigger cool walk-in fridge than we used to have. It is normal that this increases power consumption. Although many devices are energy-efficient, the power needed to fuel them is still high, as they are numerous. 

For example, if you have a laundry business, you may have more than 20 washing machines and dryer units. This means that your company consumes a lot of kilowatt-hours and that a lot of energy goes to waste, as freshwater is heated non-stop. There are heat-recovery devices that can help you make savings and take down the load on the electrical installations. 

Whether a residential or commercial customer, you should pay attention to the building and the appliances. Properly insulating walls and the roof, installing efficient windows and a smart meter in combination with solar panels can help you save. Once you are sure you can afford such improvements, it is only a matter of waiting for the savings to kick in, as your average annual consumption can benefit from insulation and heat recovery.

Current Electricity Price

You might be slightly surprised to find out that the amount people pay per unit of electricity also varies, not only by state, region, zip code, but even person to person. Different US states pay different amounts for electricity because the cost to produce it is higher in some parts of the country and lower in others. Some states with a deregulated energy market also vary their electricity price by the total power usage and production. This is a way to stimulate energy consumption when the prices are lower. 

Why does the price per unit of electricity vary within the state? Some US states have what we call energy deregulation, meaning that the provision of electricity is not limited to the state transmission and distribution service providers (TDSP). Different retail suppliers can offer electric services to customers for discounted prices. The national average electric rate per kilowatt-hour is 10.43 cents, however – the average rates in deregulated states are almost always lower.

How do you Calculate your Electric Bill?

So how do you calculate your final electric bill? How much energy you use determines your energy bills after all. You can apply the rule of thumb for your back of the envelope calculation with the following formula:

Kilowatt Hours Used x Cents per Kilowatt Hour ÷ 100 = Electric Bill

Bear in mind that how much energy you use is only a part of the equation. Other fees, such as recurring fees, can add a lot of dollars to your energy bills. These do not depend on your power usage but are rather fixed. Still, opting for lower power usage can save more money and reduce greenhouse gas emissions. 

Household electric usage is typically measured in kilowatt-hours. You can think of each unit of electricity (aka kWh) as an equivalent of the work that your appliances do. The more intensive the work, the more energy the appliance will consume. Each device in your home has a label with wattage on the back, showing how much energy the device uses, so when you multiply it by the number of hours you use it in a month, you get the watt-hour consumption.

For example, If you use your 2000-watt room heater for approximately 4 hours per day, you end up consuming 2000 watts x 4 hours x 28 days = 224,000 Wh/Month ÷ 1000 = 224 kWh/ Month.  This is only an estimation, of course: no appliance can run 24/7, except maybe a TV or a fan. The power stated on the label is called the nominal power. The actual energy use is called the effective power. Let’s have a look at an examples: 

First, you have a pace heating appliance. The label says that the tha appliance uses 2,000W. This means that for one hour of CONTINUOUS run time, the appliance uses 2,000 Wh (2 kWh). However, if you monitor the appliance, you will see that it actually runs for 10 minutes, then turns off for five (example). This means that in an hour, the effective power usage is ~1,350Wh or 1.35 kWh.

Now, you multiply your total average kilowatt-hour consumption by the average rate you pay per kilowatt-hour. For example, say you live in Texas and you haven’t yet switched electric suppliers, so you are paying the standard electricity tariff of 11.85 cents per kWh. 

So if your typical monthly usage is 1000 kWh, at a rate of 11.85 cents, your average monthly electricity bill $118.5. Of course, this calculation doesn’t include your state or local taxes and other additional charges that you typically see on your monthly invoice. 

Speaking of…

Breaking Down Your Energy Bill

When you examine your electricity bill, you will notice two different charges – a supply charge and a transmission and delivery charge. Besides these, there will be other items on your bill: fixed fees, tardy payment fees, taxes and others. Together, they make up your energy bills. 

The supply charges of your energy bill cover the cost of generating electricity. This could, for example, be the cost of operating a nuclear power plant or the cost of setting up a solar or a wind farm. In the deregulated energy states, you can shop around for supply rates charged by various retail energy providers. 

The delivery charges reflect the costs of reliable transmission and safe distribution of electricity to your home. These charges are federally regulated and governed and cannot be modified by the individual electricity suppliers. These delivery charges are paid by every commercial and residential customer and are used to maintain the power lines and the power grid. 

The final electric bill is an addition to your supply and delivery charges, multiplied by your usage. The supply charges are generally charged by your energy provider. They are based on how many kWh per month you use. The delivery charges are charged by electric utility companies, in charge of maintaining the power grid.

National Average Electric Bill

According to the US Energy Information Administration, the national average monthly electricity bill for residential customers in 2020 was $115, approximately 1.8% lower than it had been in 2019 ($118). The bills were lower for those with natural gas heating and most people living in a deregulated energy market. Take your lights bill and compare how much you pay to the national average. 

However, that’s not because the electricity prices got lower. The average U.S. residential electricity price actually went up from 12.87 cents/kWh in 2019 to 13.01 cents/kWh in 2020. But, the electricity consumption per customer resulted in a lower average bill. As the total household energy use dropped, so did the lighting bills. 

Average Residential Electric Bill

The size of the apartment or house will make a great difference to your energy bill. A larger space consumes more electricity to be heated, cooled, and lit, adding to the power bills. Your total household energy use depends more on the size of your household than it does on the kinds of appliances you use. This is some people try to calculate how much power they use per square foot and then compare their home to an average household in their area. 

The average one-bedroom apartment clocks in at 743 square feet. These apartments consume approximately 750 kWh per month. Every additional square foot will add approximately 0.5 kWh to your usage. It means that if your apartment is 900 square feet, your approximate usage will be 750 + 150(x 0.5) or 825 kWh. Beware that most electricity is used for space heating, as heating costs are connected to high energy consumption and high energy bills. 

Below are some rough estimates for average electricity and heat bills of different sizes. Our data includes spaces of different sizes, for an average home of that size. The average home includes appliances, such as air conditioners, washing machines, and boilers for heating water. Mind that particularly cold winters, when a lot of hot water is needed for home heating, can use more energy for heating than cooling in the summer.

Average Commercial Electric Bill

The average commercial customer uses approximately 6,000 kWh each month which is a lot higher than the energy usage of a household. This is due to the fact that a business, however small, runs more appliances than an average home. An air conditioner for a restaurant, for example, can have a higher electricity use than several average home air conditioners together. However, do keep in mind that this figure is an average of all businesses, from a family restaurant to a large enterprise. 

Since the commercial electric usage is so high, the average electricity rates that companies pay tend to be lower – because they can purchase in bulk. In addition, their usage is often predictable, therefore the supplier can purchase enough electricity in advance. And although the average electricity bills for commercial customers vary greatly from state to state, the average US business pays $647.61 for electricity each month.

Average Electricity Bill by State

So does the state you live in play a role in how much you pay for electricity? Yes, a big one! The average electric rates vary significantly across the different U.S. states. The average electric rate in the state with the most expensive electricity (Hawaii) is almost three times higher than in the state with the least expensive electricity (Minnesota). Of course, the average monthly electric usage among states also varies so if we want to look at average monthly electric bills by state, we will have to consider both usage and rate per kilowatt/hour.

State with the Highest Energy Bill

The unwanted award for having the highest average monthly bills goes to Hawaii! That’s right, even despite their moderate usage, Hawaiian customers paid on average $151.31/ month in 2020.  This is due to the fact that Hawaii is an island so transporting electricity there is extremely expensive.

Top 10 States With The Highest Monthly Electricity Bills

Top 10 States With The Lowest Monthly Electricity Bills

How have electricity bills changed since last year?

Are you paying more for electricity than before? The truth is that it varies across the states. We learned before that the national average residential bill went down by 1.8% in 2020, even though the average rate per kilowatt-hour went up. Let’s look at how this figure breaks among the different states:

Top 10 States With The Highest Increase in Electricity Bills

Top 10 States With The Biggest Decrease in Electricity Bills

Hopefully, by now you have a good understanding of what makes up your electricity bill, how average electricity bills vary between households and businesses, across states, and even in time. It is normal that heating costs make you use more energy than average. Mild weather and sunny days usually mean less energy is used. Regardless of how many kWh you use, you should be aware of the factors that make up your home electricity bill. 

If you worry that your electric bill is too high, you can try to reduce your usage, replace broken appliances or even schedule a utility bill audit. And if you live in one of the 18 deregulated U.S. states, you can try to look around for a better rate per kWh – which you now know has a huge impact on your final bills! Deregulated markets offer electric rates that are up to 30% lower than the national average, as is the cae with Texas, which happens to have a high household electricity consumption compared to other states.

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Updated on 01-27-23