How Much Does Electricity Really Cost?

We all use electricity in our daily lives, but how often do you stop to think about how much electricity actually costs? For all of the wonderful, modern benefits we receive from electricity, the actual price for a consumer is relatively low. Let’s take a look at the prices of electricity in the US over the past few years.

In 2011: The electricity cost in Ohio was 11.2 cents per kilowatt-hour. The national average was roughly 12 cents per kilowatt-hour, and on a list of states by electricity cost, Ohio ranked at number thirty.

In September 2013 and 2014: Electricity prices have diminished slightly since 2011. The cost in Ohio was 9.25 cents per kilowatt-hour in 2013 and 9.38 cents per kilowatt-hour in 2014. The national average in 2013 was 10.43 cents per kilowatt-hour and 10.8 cents per kilowatt-hour in 2014.

But how do you quantify a kilowatt-hour? In 2012, the average American household’s electricity usage was roughly 1,000 kilowatt-hours per month. The average usage in Ohio during that same time was about 900 kilowatt-hours per month.

Why does the electricity cost and electricity usage vary so much from state to state? The differing habits of people in each region of the country results in a wide variety of usage patterns and energy prices. For example, electricity usage is much higher in the South due to the hot climate and high humidity; however, New England and the noncontiguous states of Alaska and Hawaii actually have higher overall electricity costs.


There are many things that go into determining the cost of electricity. As with all resources in our economy, supply and demand is certainly a factor. There are also the limitations of local infrastructure and the availability of natural gas and other resources used to produce electricity. Also, labor costs vary from state to state, which can influence the sticker price of electricity from region to region.

These reasons help to explain why states like Alaska and Hawaii have significantly higher electricity costs. These states have to pay to transport nearly everything in, which includes the means to produce electricity. This drives up prices and makes the entire process more expensive.

In the future, the availability of renewable energy and an increase in the number of transmission projects will likely play a big part into reducing electricity cost for the same reasons. With localized renewable energy resources widely available and streamlined infrastructure for transmission projects, electricity prices would not need to be as high as they are today.

Still have questions about electricity prices? Check out the FAQ section of the US Energy Information Administration to learn more!