How the average price is computed

Every price on this site is one division. The U.S. Energy Information Administration (EIA) asks each electric utility how much revenue it took from a class of customers and how many kilowatthours it sold them. Revenue divided by sales is the average revenue per kilowatthour, which EIA publishes under the name "average price".

average price = revenue from the sector ÷ kilowatthours sold to the sector

For 2024, US residential revenue divided by US residential sales came to 16.48¢ per kWh. The same arithmetic, applied to one utility's residential rows on Form EIA-861, gives the figure on that utility's page.

What is inside the number

• Every charge that becomes revenue. The fixed monthly customer charge, the energy charge, fuel and purchased-power adjustments, riders for storm recovery or efficiency programmes and demand charges all land in revenue. None of them is visible separately.
• Every rate schedule in the sector. A utility may have a standard residential rate, a time-of-use rate, an electric-heat rate and a low-income rate. The average blends them in proportion to the kilowatthours sold under each.
• A whole year. Summer and winter rates, mid-year rate changes and fuel-cost swings are averaged over twelve months. Monthly state figures show the movement within a year.

Why it is not a tariff rate

Because fixed charges are spread over kilowatthours, the average price depends on how much customers use. Two utilities with identical rate schedules will show different average prices if one serves small apartments and the other large all-electric homes: the fixed charge weighs more on each of the first utility's kilowatthours. The average price of a utility with a $30 fixed charge and a 10¢ energy rate is 16¢ at 500 kWh a month and 13¢ at 1,000 kWh.

That is also why a utility's average price and its average bill can point in different directions. The US average bill in 2024 was $142.26 a month on 863 kWh; a state with a low price and heavy air-conditioning load can sit above that, and a high-price state with mild weather below it.

Bundled service only

Where customers can buy energy from a retail supplier, the delivery utility and the supplier each report their own part of the bill. Dividing part of a bill by all of the kilowatthours would understate the price, so the site computes average prices from bundled service alone. Retail choice in EIA data covers the detail.

Reading it sensibly

The average price is a fair summary of what a utility's residential customers paid per unit in a year, and a fair way to set one utility beside its state or the country. It does not say what a particular household would pay, which depends on the rate schedule it is on and the amount and timing of its use. For that, the utility's tariff and the state utility commission are the sources.