Electricity Rates by State

The biggest story in this morning's data is California's dramatic 4.4-cent drop in residential electricity rates for January 2026, the largest single-state move in the dataset and a meaningful reprieve for consumers in a state that has long ranked among the nation's most expensive markets. The national average came in at 18.0 cents per kilowatt-hour for January 2026, the latest period reported, compared to the prior December 2025 reading — a figure that masks significant regional divergence. Hawaii remains the most expensive state in the country at 39.8 cents, more than double the national average, a structural reality driven by the island state's near-total dependence on imported petroleum for power generation. On the opposite end, North Dakota holds the lowest rate at 10.9 cents, reflecting abundant coal and wind resources in a lightly populated grid with relatively low transmission costs.

The broader directional picture tilts firmly upward. Thirty states saw rates rise from December to January while only 13 moved lower and 8 held stable, suggesting the California decline is more exception than trend. Connecticut posted the sharpest increase among the top movers, up 3.0 cents, which is consistent with the Northeast's chronic exposure to volatile natural gas prices during winter heating season — the region's 25.2-cent average is the highest of any in the country. Nevada rose 1.2 cents and South Dakota climbed 1.1 cents, two geographically distinct states whose increases likely reflect different pressures: summer-to-winter demand shifts in Nevada's desert climate versus fuel mix adjustments in the Northern Plains. The South and Midwest remain the most affordable regions, both averaging 14.4 cents, underscoring how access to diverse, low-cost generation — natural gas, coal, nuclear, and hydro — continues to insulate those consumers from the price spikes hitting coastal markets.

A note on timing: the EIA typically publishes residential electricity rate data with a lag of roughly six to eight weeks after the close of the reference month, meaning the January 2026 figures released today represent the most current available snapshot. Consumers shopping for fixed-rate electricity plans in deregulated markets should treat these numbers as a baseline — retail rates on the open market can differ from EIA averages, and locking in now ahead of anticipated spring and summer rate adjustments could offer meaningful savings depending on your state.