U.S. residential electricity expenditures increased by $5 per month in 2021
Note: Inflation adjustment uses the U.S. Bureau of Labor Statistics’ Consumer Price Index.
Utility electric bills for residential customers in the United States increased by $5 per month to average $122 in 2021. Average monthly residential electricity expenditures ranged from a high of $178 per month in Hawaii to a low of $82 per month in Utah.
The 4.3% increase in 2021 was the second-largest annual increase in nominal electricity expenditures over the past decade. According to the U.S. Bureau of Labor Statistics’ Consumer Price Index, overall consumer prices increased at the slightly higher rate of 4.7% in 2021. Residential electricity prices have tended to increase less than overall inflation measures over the past decade.
Utility electricity expenditures reflect both prices and the amount of grid-delivered electricity that customers consume. We do not directly survey electricity prices or bills, but rather estimate expenditures by dividing utilities’ revenues from residential customers by those customers’ electricity consumption.
The average U.S. residential electricity price paid to utilities rose 4.3%, from 13.2 cents per kilowatthour (kWh) in 2020 to 13.7 cents/kWh in 2021. Utility electricity consumption per residential customer averaged 892 kWh per month in 2021—a slight decrease from 893 kWh per month in 2020.
Despite having the lowest average residential consumption of any other state, residential customers in Hawaii had the highest state average monthly utility expenditures in 2021, at $178 per month. Hawaii’s electricity prices and expenditures are highest because the state's utilities use significant amounts of petroleum for electricity generation.
Connecticut had the second-highest average residential utility bills, at $156 per month. This rate is typical of New England states, where electricity prices tend to be higher because constraints on natural gas pipeline capacity during peak demand periods drive up the cost of utility generation.
Other states with relatively high residential electricity bills, such as Alabama, South Carolina, and Mississippi, tend to have relatively low electricity prices but relatively high electricity consumption because southern states tend to use more air conditioning and are more likely to have electric space heating equipment.
States with the lowest monthly residential utility bills, such as Utah ($82 per month), New Mexico ($90), and the District of Columbia ($93), tend to have less-than-average residential electricity prices and less-than-average consumption.
Principal contributor: Alex Gorski
Tags: prices, residential, electricity, Hawaii, states, utility, Utah, United States