Cheapest electricity rates by state
Idaho has the lowest average residential electricity rate in the United States at 12.35 cents per kilowatt-hour, 33% below the national average of 18.44¢. At 1,000 kWh a month that is a difference of about $61 against the average American household bill.
The ten cheapest, ranked
| State | May 2026 (¢/kWh) | May 2025 | Change | vs. U.S. |
|---|---|---|---|---|
| Idaho | 12.35 | 11.88 | +4.0% | -33.0% |
| Utah | 12.96 | 12.60 | +2.9% | -29.7% |
| Oklahoma | 13.38 | 12.94 | +3.4% | -27.4% |
| Nebraska | 13.59 | 13.15 | +3.3% | -26.3% |
| Nevada | 13.60 | 13.29 | +2.3% | -26.2% |
| North Dakota | 13.61 | 13.10 | +3.9% | -26.2% |
| Missouri | 13.68 | 13.01 | +5.1% | -25.8% |
| New Mexico | 14.12 | 14.50 | -2.6% | -23.4% |
| Iowa | 14.14 | 14.16 | -0.1% | -23.3% |
| Louisiana | 14.15 | 13.26 | +6.7% | -23.3% |
Change measured against May 2025. Source: U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.A: Average Price of Electricity to Ultimate Customers by End-Use Sector, by State.
What makes a state cheap
Cheap electricity in the United States almost never comes from a state being clever about procurement. It comes from geology, hydrology or corporate structure. Those are three things a state either has or does not.
Paid-off dams
Idaho, Washington and Oregon share the Columbia and Snake river hydroelectric systems. Those dams were built largely with federal money decades ago, their capital cost has been recovered, and water costs nothing. The Bonneville Power Administration sells the federal output at cost rather than at market price, and the public utility districts and co-operatives holding allocations pass that directly to customers. No other resource in the American mix competes on running cost.
Fuel at the mine mouth
Wyoming, North Dakota, Montana and parts of Utah burn coal in plants built next to the mines that supply them. Transport is normally the largest component of delivered coal cost, and these plants avoid it entirely. Oklahoma and Louisiana do the same thing with natural gas. The catch is that these fleets are old. They are cheap precisely because they are nearly fully depreciated, and their replacements will not be.
No shareholders
Nebraska is the only state in the country with no investor-owned electric utility. Every customer is served by a public power district, a municipal system or a co-operative. A regulated investor-owned utility typically earns close to a ten per cent return on its rate base; Nebraska simply does not pay it, and it borrows at tax-exempt municipal rates rather than corporate ones. That structural difference is worth more than most procurement strategies.
Wind that owns itself
Iowa generates more of its electricity from wind than any other state, and its utilities own much of that fleet outright rather than buying under contract. Zero fuel cost flows to ratepayers instead of to a merchant generator. Iowa's rate was essentially flat year over year while the national average rose, which is what a largely fuel-free fleet looks like when gas prices move.
Where every state sits
Frequently asked questions
Which state has the cheapest electricity in 2026?
Idaho, at 12.35 cents per kilowatt-hour as of May 2026. Utah (12.96¢) and Oklahoma (13.38¢) are next.
Why is electricity so cheap in these states?
Three patterns account for nearly all of it. Hydroelectric states such as Idaho, Washington and Oregon run dams whose construction cost was recovered decades ago and whose fuel is free. Fossil-producing states such as Oklahoma, Wyoming and North Dakota burn fuel extracted nearby, avoiding transport cost. And Nebraska has no investor-owned utility at all, so its rates carry no return on shareholder equity.
How much would I save living in the cheapest state?
At 1,000 kWh a month, Idaho's rate produces a bill of about $124 versus $184 at the U.S. average. That is roughly $61 a month, or $731 a year, for identical usage.
Will cheap states stay cheap?
Several of them are running on borrowed time. The low-cost coal fleets in Wyoming, Utah, Missouri and Kentucky are old and largely depreciated, which is precisely why they are cheap, and replacing them will require new capital. Hydro states face drought risk and load growth that hydro cannot expand to meet. Iowa and Oklahoma, whose advantage rests on wind with no fuel cost, are on firmer ground.