Electricity is priced regionally, not nationally
State borders are political. The grid is not. Six regional structures explain most of why American electricity prices vary the way they do, and states inside one of them frequently move together even when they have nothing else in common. The U.S. average is 18.44¢ per kilowatt-hour as of May 2026.
The two states with no connection to any other grid, where fuel logistics rather than market design set the price.
The highest mainland rates in the country, driven almost entirely by what is wrapped around the electricity rather than the electricity itself.
One state, two electricity markets, and a gap between them wider than the gap between many entire states.
Six states sharing one constrained gas pipeline network, which sets the winter price for all of them.
The wholesale market whose capacity auction repriced and pushed residential rates up across nine jurisdictions in a single year.
The only state running its own grid, with no capacity market and the deepest retail competition in the country.
A single wholesale market stretching from Manitoba to the Gulf, containing both the cheapest wind states and some of the highest delivery costs in the country.
Vertically integrated utilities, no retail choice, moderate rates and the highest household consumption in the country.
Federal hydropower built decades ago, sold at cost, and now paying for the grid a decarbonising economy needs on top of it.
Cheap legacy coal and abundant sun, with costs decided by how fast each state is retiring one and building the other.
An outstanding wind resource, cheap in-state gas, and the only state in the country with no investor-owned utility.
Why the region matters more than the state
The clearest demonstration came in the year to May 2026. Illinois, Ohio, Maryland, New Jersey, Pennsylvania and the District of Columbia all rose sharply at the same time. Those jurisdictions differ in generation mix, politics, utility ownership and whether they import or export power. What they share is PJM, and specifically its capacity auction, which repriced and flowed into default-service rates within months.
New England works the same way for a different reason. Six states share one constrained gas pipeline network, so a cold snap sets the marginal price for all of them regardless of what any individual state has decided about energy policy.
The regions where states behave independently are the ones without an organised wholesale market. Across the Southeast and much of the Mountain West, vertically integrated utilities plan and build their own capacity, and rates move when a commission approves a rate case rather than when an auction clears. That is why those regions show much more variation between neighbouring states.