How to calculate electricity cost

The formula

A residential electric bill is built from three pieces:

1. Energy used, in kilowatt-hours (kWh), read from the meter for the billing period.
2. Per-kWh charges, multiplied by those kWh. On most bills there are several: generation or supply, delivery (distribution and transmission), and riders for fuel, storm recovery or programs.
3. Fixed charges and taxes: a monthly customer charge that does not depend on use, plus state and local taxes and fees.

Written out: cost = kWh × price per kWh + fixed charges + taxes. If the price is in cents, divide the product by 100 to get dollars. A month with no electricity use at all still costs the fixed charge.

To check your own bill, find the kWh line (usually labelled "usage" or "kWh used", with the previous and current meter readings), multiply it by each per-kWh charge listed in the detail section, then add the customer charge and taxes. The sum should match the total, apart from rounding and any credit or late fee.

The arithmetic checked against EIA's averages

EIA publishes average use, average price and average bill for the country, so the formula can be tested on real figures. For 2025, the average residential customer used 874 kWh a month and paid an average of 17.23¢ per kWh². Multiply the two and divide by 100: the result lands close to EIA's average monthly bill of $150.68¹. The small gap is expected, because the price and the bill come from different EIA tables and are each rounded.

The same check works on other periods. Over the last 12 months (September 2025 to August 2026), use averaged 875 kWh a month at an average price of 18.04¢ per kWh, for an average bill of $157.84. In the single month of August 2026, the average home used 1,152 kWh at an average of 18.16¢ per kWh, for a bill of $209.23³. Figures since January 2026 are preliminary.

Two lessons follow. First, EIA's "average price" is not a rate printed on any tariff: it is what customers paid in total divided by what they used, so it already contains fixed charges and riders spread over each kWh. Second, from month to month the kWh move much more than the price. Over the last 12 months, use per home ranged from 678 kWh in April 2026 to 1,160 kWh in July 2026, while the monthly average price stayed between 17.11¢ per kWh (December 2025) and 18.86¢ per kWh (April 2026³). A bill estimate built on one month's use will be off for the rest of the year.

Same bill, very different prices

Because a bill is a product of two numbers, a high price per kWh does not by itself mean a high bill. California and Louisiana show it clearly. In 2025, California's residential customers paid an average of 31.35¢ per kWh and used 494 kWh a month; Louisiana's paid 12.52¢ per kWh² and used 1,225 kWh. The average monthly bills ended up at $154.73 and $153.32¹.

Hawaii's average price in 2025, 40.40¢ per kWh, was the highest among the states, yet its homes used only 515 kWh a month, so the average bill, $207.89, was not proportionally higher. Utah combined a below-average price, 13.02¢ per kWh², with modest use, 761 kWh, and its average bill was $99.06¹. Every state sits somewhere on the grid below; the further up and to the right, the higher the bill.

Source: EIA, Historical state data, annual sales, revenue and customers; EIA-861 2025, average monthly bill by state. Each dot is a state (horizontal: Residential ¢/kWh, 2025; vertical: kWh a month, 2025). Residential revenue divided by sales in 2025, all providers (EIA-861 final). Residential kilowatt-hours per customer per month, 2025.

Show the numbers

State	Residential ¢/kWh, 2025	kWh a month, 2025
North Dakota	11.82¢	1,070
Idaho	11.83¢	933
Nebraska	12.05¢	973
Louisiana	12.52¢	1,225
Arkansas	12.87¢	1,076
Montana	12.99¢	853
Utah	13.02¢	761
Kentucky	13.13¢	1,094
Washington	13.17¢	945
Oklahoma	13.21¢	1,064
Tennessee	13.22¢	1,180
Nevada	13.26¢	868
Missouri	13.30¢	1,038
South Dakota	13.32¢	984
Wyoming	13.37¢	835
Iowa	13.62¢	861
North Carolina	14.00¢	1,044
Mississippi	14.03¢	1,184
Kansas	14.44¢	876
Georgia	14.74¢	1,077
New Mexico	14.85¢	638
South Carolina	15.12¢	1,067
Florida	15.21¢	1,103
Arizona	15.26¢	1,030
Virginia	15.28¢	1,067
West Virginia	15.39¢	1,073
Texas	15.40¢	1,110
Oregon	15.46¢	866
Colorado	15.69¢	658
Minnesota	15.83¢	744
Indiana	15.96¢	938
Alabama	16.09¢	1,145
Ohio	16.90¢	874
Delaware	17.15¢	920
Illinois	17.67¢	717
Wisconsin	18.08¢	667
Pennsylvania	19.29¢	839
Maryland	19.53¢	945
Michigan	20.03¢	635
District of Columbia	21.92¢	639
New Jersey	22.48¢	670
Vermont	22.79¢	592
New Hampshire	24.53¢	640
Alaska	26.11¢	564
New York	26.39¢	586
Maine	27.69¢	533
Connecticut	29.31¢	704
Rhode Island	29.48¢	562
Massachusetts	30.41¢	596
California	31.35¢	494
Hawaii	40.40¢	515

The practical point: when you compare places, for a move or for a news story, compare bills or multiply both numbers, not just cents per kWh. The average bill by state and electricity use by state rankings set out both halves of the product for every state.

Which price per kWh to use

The multiplication is the easy part. The price is harder, because four different "prices per kWh" are in circulation, and each answers a different question:

• Your bill total divided by its kWh. Your all-in average for that month, fixed charges and taxes included. Good for tracking your own costs over time; it tends to rise in low-use months because the fixed charge is spread over fewer kWh.
• The sum of the per-kWh charges on your tariff, without the customer charge. This is the cost of one more kWh, and it is the right number for estimating what an appliance, a heater or an electric car adds to the bill. With tiered or time-of-use rates it depends on how much you have already used, or when.
• EIA's average revenue per kWh for a state or utility: total revenue divided by kWh sold, including fixed charges and riders but excluding most taxes. It describes what a whole population of customers paid; see EIA's explanation of its sales, revenue and average price data.
• The Bureau of Labor Statistics average price, the U.S. city average for electricity per kWh collected for the Consumer Price Index. It was $0.190 per kWh⁴ in October 2026. BLS collects it as billed, taxes and fixed charges included, so it does not match EIA's figure and should not be compared with an EIA month.

A calculator that multiplies your kWh by a state average gives a fair estimate of a typical bill. It cannot give your exact bill, because no state has a single tariff: EIA counted 3,037⁵ distribution utility records in 2025, each with its own rates.

From watts to dollars: one appliance

Appliances are rated in watts. A kilowatt is 1,000 watts, so divide the wattage by a thousand to get kilowatts, then multiply by the hours of use to get kWh:

kWh = watts ÷ a thousand × hours of use

An appliance drawing 1,000 watts for one hour uses exactly one kWh, so an hour of its use costs whatever one kWh costs you. At the US residential average of 18.04¢ per kWh³ over the last 12 months, that is the cost of the hour; at your tariff's per-kWh charges, it is your cost. Ten hours cost ten times as much, and a month of daily use about thirty times the daily figure.

Two cautions. The wattage on a label is usually the maximum draw: a refrigerator or an air conditioner cycles on and off, and a heater with a thermostat runs only part of the time, so real use is lower than watts × hours suggests. And the price to use is the marginal one, the per-kWh charges without the customer charge, since running the appliance does not change the fixed part of the bill. Nationally, refrigerators took 8% of household electricity and air conditioning 19%⁶ in EIA's 2020 Residential Energy Consumption Survey, a pandemic year; newer survey data are due in 2027.

When the bill has a supply line and a delivery line

In states with retail choice, a customer who buys from a supplier gets two sets of per-kWh charges: the supplier's price for the energy, and the utility's delivery charges for the wires. The calculation is the same for each line, kWh times that line's price, and the bill shows both.

EIA's averages for these parts cover different customers, so they cannot be added into a total. In Pennsylvania in 2025, customers who took full service from their utility paid an average of 18.75¢ per kWh; for customers with a supplier, suppliers billed an average of 12.92¢ per kWh for energy only, and utilities billed an average of 8.08¢ per kWh⁵ for delivery only. The chart sets them side by side.

Utility full-service customers (default service): supply and delivery18.75¢

Competitive suppliers and CCAs: supply only12.92¢

Utility delivery for customers of a supplier: delivery only8.08¢

Source: EIA-861 annual electric power industry report, 2025 final. Average revenue per kWh by service part, EIA-861 2025. Supply-only and delivery-only averages each cover only part of a bill and different groups of customers; adding them gives only a rough estimate of what a shopping customer paid in total.

Show the numbers

Part of the market	¢/kWh
Utility full-service customers (default service): supply and delivery	18.75¢
Competitive suppliers and CCAs: supply only	12.92¢
Utility delivery for customers of a supplier: delivery only	8.08¢

Texas is different again: in the areas open to competition, retail providers bill energy and delivery together. Each plan's Electricity Facts Label, required by 16 TAC §25.475, shows the average price at 500, 1,000 and 2,000 kWh with delivery and fixed charges included. Those three figures differ because fixed charges and any usage-based bill credits are spread over different amounts of kWh, so the column nearest your own monthly use is the one to multiply. For context, retail providers' residential customers paid an average of 17.23¢ per kWh⁵ in 2025, a past average across all plans, not an offer. The Texas retail choice guide shows how to read the label.

Time-of-use and tiered rates

On a flat rate, every kWh costs the same and the formula needs one price. On a tiered rate, the price changes after a set number of kWh in the month; on a time-of-use rate, it changes with the hour. The method then becomes: split your kWh by tier or by period, multiply each part by its own price, and add the parts. Where the utility offers it, smart-meter data on its website give the hourly split. In 2025, 11.3%⁷ of US residential customers were enrolled in time-of-use or other time-varying pricing, according to EIA.

Doing it with your own numbers

1. Take the last 12 bills, not one, so that summer and winter are both in the figure.
2. Add up the kWh and the dollars, and divide: that is your yearly all-in price per kWh.
3. For a change in use (a new appliance, an electric car, a heat pump), multiply the extra kWh by the per-kWh charges on your tariff, not by the all-in average.
4. Compare your yearly price and use with your state's averages on its page, reached from the list of states.
5. For a quick estimate at state averages, use the bill calculator. If the result looks far from your bill, the high bill guide walks through the usual causes.