Electricity Prices Surge in US: Map Shows Most-Expensive States

Electricity prices are spiking across the country, posing another challenge for President Donald Trump after the rising cost of gas at the pump and skyrocketing egg prices continue making headlines.

In a research note shared last Friday, David Michael Tinsley, senior economist at the Bank of America Institute, found that the median customer utility bill payment rose 6 percent in January, "well above the rate of inflation in utilities, reflecting higher usage."

If bill payments continue to rise "at elevated rates," Tinsley wrote, as they have done consistently after the end of 2023, "then it is possible households, particularly lower-income ones, might need to reduce their spending on discretionary items to cover their bills."

Why It Matters

During his 2024 presidential campaign, Trump promised to halve energy and electricity costs "within 12 months, at a maximum 18 months." To do so, the Trump administration plans to pump up domestic production, crack down on renewables, and loosen environmental regulation so as to "drill, baby, drill."

However, experts have expressed doubts over Trump's strategy and the likelihood he will be able to keep his promise, saying that presidents have limited power to influence the global oil market, and reducing renewables might be counterproductive. While cheaper gas prices, brought about by an increase in supply, could lower electricity prices, experts do not think they could be cut by as much as 50 percent.

What To Know

The conservative think tank American Enterprise Institute (AEI) said electricity prices are reaching levels unmatched since the 1990s, when considering inflation.

Electricity prices vary wildly by location, and some households face higher bill payments than others. Here is a map showing electricity prices by state in February.

The average electric rate in the U.S. was 16.54 cents per kWh in February, according to data from Electric Choice. Louisiana had the cheapest electric rate on average, with residents paying 11.23 cents per kWh. Hawaii had the highest rate, with customers paying 42.10 cents per kWh. On average, American households use 899 kWh of electricity each month—meaning that Hawaii residents pay a monthly electric bill of $378, on average.

Tinsley wrote that part of the reason why electricity bills are higher is that households are consuming more electricity. According to the U.S. Energy Information Administration's (EIA) data, residential electricity consumption grew 2.7 percent in 2024, while natural gas consumption fell 4.3 percent.

"For consumer bills, it's the rise in electricity consumption that matters more because the average household spends over three times as much on electricity than on gas," Tinsley wrote.

What People Are Saying

Trump said in September 2024, during his presidential campaign: "If you make doughnuts, if you make cars—whatever you make, energy is a big deal, and we're going to get that—it's my ambition to get your energy bill within 12 months down 50 percent."

Lynne Kiesling, codirector of the Institute for Regulatory Law and Economics at Northwestern University, a member of the Department of Energy's Electricity Advisory Committee and lead author on the AEI report, told E & E News by Politico: "A lot of people are seeing increasing prices. It's those wires and system charges that are going up."

Michelle Solomon, manager of the electricity program at the research firm Energy Innovation, told E & E News by Politico: "I don't see how any of the Trump administration policies could realistically reduce electricity prices for consumers. It seems like the Trump administration is trying to put its thumb on the scales for certain resources over others versus letting the market dictate which resources are the cheapest."

What Happens Next

The EIA expects demand for electricity in the U.S. to continue growing this year, potentially leading to higher bills for Americans. For Trump, it may be a difficult problem to solve as he focuses his attention on fossil fuels; and for some Americans, especially those in lower-income households, it could mean having to cut down significantly on spending.

"Over the past few years, a strong labor market and growth in after-tax wages and salaries has allowed consumers to ride out some cost pressures, including rising utility bills," Tinsley wrote. "But if the labor market were to cool—and job openings are well down on their previous levels—then consumers may increasingly feel the need to ease back on discretionary spending to keep the lights (and the heat) on."