Retail electricity prices vary quite a bit from state to state and region to region. A lot of factors play into this, such as climate, the available power generation nearby, the ability of the power grid to dispatch that power, how interconnected the grid is with other resources, and many more variables.
The time of day and the time of year also matters when looking at electricity demands and costs — with costs usually peaking in the summer as more expensive generation sources come online to help keep air conditioning running, among other things.
Electric utilities often try to recoup the costs of grid improvements through raising rates, as the need for grid upgrades, needed maintenance, storm hardening, cybersecurity and critical infrastructure improvements grow. Some states have fully regulated electricity costs, and some others have a hybrid system where some segments of power production are regulated and/or publicly owned and others are unregulated.
Using 2022’s data as a yardstick, the annual average electricity cost per kilowatt varied from nearly 40 cents in Hawaii to about 8.2 cents in Wyoming, according to data collected by the Department of Energy’s Energy Information Administration.
From January 2022 to January 2023, there was a 12.75% jump in electricity costs per kWh — a growth of double the rate of inflation.
What follows is a look at the states where electricity cost the most, from January 2022 to January 2023, using data from the EIA.