States Where Electricity Prices Are Actually Falling

The general impression about electricity prices across the US is that they are rising rapidly. While this may not be entirely true in every state, the general public likely believes it is. NPR recently reported, “Across the country, electricity prices have jumped more than twice as fast as the overall cost of living in the last year.” The New York Times reported, “Electricity prices have soared recently because of fast-rising demand for energy from residents, businesses, and data centers used for artificial intelligence. The national average retail rate was 5 percent higher in November from a year ago, nearly double the overall inflation rate.”

Because studies use varying time periods, making an absolute statement about the rate at which prices by state are rising or falling isn’t possible. Some studies compare total electricity bills to entire household budgets, while others look at changes based on per kilowatt-hour (kWh). Kiplinger recently published a story titled “The States Facing the Biggest Electric Bill Increases in 2025,” which examined dollars spent per year per household. Their metric was “% difference in annual spending.”

These studies show that electricity costs and their relationship to household budgets, inflation, and raw costs produce different answers about electricity price trends.

For our study of states where electricity prices are falling, we used Quick Electricity’s “Cost of Electricity by State 2025 vs 2024.” They used data from the U.S. Energy Information Administration (EIA) to “provide a comparison of average residential electricity prices by state, including year-over-year changes from March 2024 to March 2025.” Based on cents/kWh (kilowatt-hour), the average nationwide increase was 2.58% for the period measured, bringing the national rate to 17.11 cents/kWh.

Based on cents/kWh, some states had very high rates regardless of whether they rose or fell. The report stated, “As you can see in the table above, there are currently 10 states with an average electricity price above 20 cents per kWh. This includes Alaska, California, Hawaii, New York, and the New England states.”

Nine states posted falling (decreasing) residential electricity costs year-over-year during this period:

• Nevada: -13.92% (largest drop, due to solar/renewable expansions reducing reliance on higher-cost sources such as oil and coal)
• Hawaii: -9.15% (drop from higher rates due to renewables; currently 80% from fossil fuels)
• North Carolina: -3.78%
• Missouri: -3.31%
• Iowa: -2.94%
• Arkansas: -2.64%
• Montana: -1.97%
• Ohio: -0.98%
• California: -0.37%

These drops contrast sharply with jumps in states that had large increases, including Maine (+27.00%), District of Columbia (+15.19%), Indiana (+13.70%), Utah (+13.23%), Connecticut (+11.78%), and Illinois (+10.21%).

Looking ahead, some states face even larger increases, mostly caused by data center buildouts. Kiplinger forecasts that there will be increases of 12% or more in some states when all of the 2025 data is compiled. These include Indiana, Illinois, Tennessee, New Jersey, Washington, Maine, Massachusetts, Kentucky, and New York.

The outlook worsens even more between now and 2030. A new report from investment bank Goldman Sachs, titled “AI to drive 165% increase in data center power demand by 2030,” says that demand will rise at a rate unprecedented in history. It does not provide exact information on rates per state. However, it makes clear that supply almost certainly cannot keep up with demand. ICF reports, “For residential customers, electricity rates could increase by 15% to 40% by 2030, depending on the market. By 2050, some rates might even double.”

It is difficult to see how this demand will not harm the environment. Stax Engineering recently published an analysis titled “The environmental impact of data centers.” Its authors emphasized that “Data center emissions are caused by the thousands of servers and IT devices that run on electricity generated primarily from fossil fuels, such as coal, natural gas, and oil. These all release significant amounts of carbon dioxide (CO2) and other greenhouse gases into the atmosphere, contributing to global warming and climate change.”

Ultimately, both consumers and the environment will pay a steep price. However, there are moves to increase the use of renewable energy for electricity generation, which should moderate residential prices. The International Renewable Energy Agency reports, “91% of New Renewable Projects Now Cheaper Than Fossil Fuels Alternatives.” The question is: how fast can renewables come online?