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Top 8 States With the Lowest Electricity Rates

Electricity rates are something that every home or business owner should be aware of. The energy cost is constantly fluctuating, and it’s essential to know how your utility company can affect the bottom line for your financial goals. With so many options out there, it can be hard to find a plan that will work best for you. This blog post features 8 states with the lowest electricity rates in America.

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1. Alaska

The state of Alaska has an average electricity rate of $0.1923 per kWh. Alaska’s energy costs rank as the nation’s cheapest due to its abundance of natural resources and lack of population density; however, utility rates can fluctuate significantly throughout different times of the year and even between different parts of the state.

Utility companies in Alaska provide electricity to customers in more than 200 rural communities not connected to the main North American power grid. These remote regions rely on diesel generators for electricity, which can increase costs significantly. Utility providers have undertaken several initiatives in Alaska, intending to reduce their greenhouse gas emissions and lower their dependence on fossil fuels.

2. Texas

The state of Texas has average electricity of $0.0888 per kWh. As its name suggests, much of Texas is known for hot summers and mild winters. However, temperatures can vary dramatically throughout different parts of the year due to strong winds brought on by thunderstorms or hurricanes. That can sometimes form in the Gulf of Mexico.

This large and diverse state is home to several different climatic conditions that can affect energy costs for homeowners and businesses alike. That’s why you need to learn more about Texas electricity rates before choosing your electricity plan. However, Texas has a strong economy with plenty of business activity as well as low unemployment rates, which means there is a steady demand for electricity generation across most parts of the year.

3. Colorado

The state of Colorado has an average electricity rate of $0.1181 per kWh. Much like its neighboring mountain state Arizona, Colorado experiences mild summers and snowy winters, which can cause significant fluctuations in energy costs throughout different times of the year. However, several federal initiatives have been implemented to help reduce overall emissions and promote renewable energy sources.

The Centennial State is home to the most significant operational solar power plant in the United States, generating more than 140 MW of clean electricity, accounting for around three percent of Colorado’s total demand. The state also ranks as one of the best places to own residential solar panels, with plenty of sun exposure and high electricity demand.

The state’s abundant supply of natural resources and its location in the “wind belt,” which refers to an area within proximity to fast-moving winds, can produce power turbines with ease. This has led Colorado to become one of the leading states when it comes to harnessing renewable energy.

4. Wyoming

The state of Wyoming has an average electricity rate of $0.1203 per kWh. Wyoming is one of several states that rely heavily on coal to meet its energy demands.

The sparsely populated state has a population of just over 500,000 people. Only around one percent of residents heat their homes using electricity; however, it is home to several large cities such as Cheyenne and Casper, which can drive demand power generation during certain parts of the year.

The state has a very diverse economy and one of the lowest unemployment rates in the country, which means there is a steady demand for electricity generation across most parts of the year. However, Wyoming does rely heavily on coal mining to generate revenue, so changes to energy policy could impact future electricity prices.

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5. Arkansas

The state of Arkansas has an average electricity rate of $0.1226 per kWh. Arkansas relies heavily on coal to meet its energy demands, with around 95 percent coming from this single source, which helps keep prices low for residents and businesses.

The Natural State is also home to some of the world’s most extensive energy facilities, with several coal-fired power plants located in the state.

Arkansas has an average annual temperature of around 63 degrees Fahrenheit, and it is one of a handful of states that experience very few days where temperatures fall below freezing. However, high elevation areas such as those found in and around Ozark National Forest can experience milder temperatures due to the region’s high altitude.

The fairly populous state has just over three million people, and only around one percent of residents heat their homes using electricity. It is home to several large cities, such as Little Rock and Fayetteville, which can drive demand for power generation during certain parts of the year.

6. Oklahoma

Oklahoma has an average electricity rate of $0.1236 per kWh. Oklahoma is one of several states that rely heavily on coal to meet its energy demands, with around 90 percent coming from this single source. Nevertheless, many wind-powered generating facilities have been built in recent years to reduce greenhouse gas emissions.

Oklahoma is home to some of the largest coal reserves in North America, which helps keep prices low for residents and businesses. Still, this reliance on one source has also made Oklahoma highly susceptible to price fluctuations when compared against other states that have more diverse energy portfolios.

The state does experience very few days where temperatures fall below freezing. But, the average annual temperature of around 64 degrees Fahrenheit is on par with most other states in the country.

7. Arizona

Arizona has the lowest electricity rates in the US, making it an attractive option for residents and businesses alike. Residents can take advantage of Arizona’s lower rates by enrolling in their time-of-use plan that offers three different rate periods throughout the day. Residential customers who enroll in this plan will be charged higher during peak hours (3 pm to 10 pm), while off-peak hours are much less expensive. Businesses have also been drawn to Arizona because of its low energy prices, with many taking advantage of renewable solar power options or natural gas plants to keep costs down.

8. Mississippi

Mississippi has the lowest electricity rates in the US. Mississippi Power offers a 12-month fixed-rate plan for $0.062 per kilowatt-hour, cheaper than all of their competitors from other states and cities with over 100,000 people. Mississippi Power has been recognized as one of America’s best utilities by Forbes Magazine and MSN Money because they offer some of the cheapest rates in the country with an excellent customer service record.

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