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Average Residential Electricity Price per kWh (2018)

In 2018, the state of Arizona posted an average electricity price of 12.8 cents per kilowatt-hour (kWh).  Arizona tied with New Mexico for the second highest average electricity price among western states, while California posted the highest price at 18.9 cents per kWh. Arizona’s price was slightly less than the U.S. average. Electricity prices in the Northwest were among the lowest with Washington leading the way at 9.6 cents per kWk.

Tucson Electric Power and Trico Electric Cooperative both served select areas of Pima County and posted average electricity prices consistent with the state of Arizona. In 2017, Tucson Electric Power had a slightly lower price than the state, at 12.1 cents per kWh, while Trico Electric Cooperative had a slightly higher price at 14.2 cents.

Why is it important?

Utilities are considered natural monopolies, where competition and free-market entry do not exist; therefore, the government regulates electric utilities. Government regulation serves to ensure that service is adequate, companies are responsive, prices are fair, and that the utility sticks to strict safety standards. Even with government regulation, the average price of electricity can vary widely because of variation in the operating costs of the utility. Additionally, prices may vary based on time-of-day pricing and consumer charges.  

Electricity use accounts for a large share of household spending. Customers who generate their own electricity through net metering may reduce their utility purchases and sell energy back to a utility. Net metering is one way that electricity consumers are reducing their overall energy costs. Households that participate in net metering typically generate energy through personal solar collection, but may also use other means, such as wind, hydroelectric, or virtual solar. 

How do we compare?

In 2017, there was significant variation in the average electricity price among utility companies located in Arizona. The highest priced utility, at 17.1 cents per kWh, was Columbus Electric Cooperative, which serves southeastern Arizona and southwestern New Mexico. Tucson Electric Power and Trico Electric Cooperative had average utility prices of 12.1 and 14.2 cents per kWh, respectively. 

The number of customers who participate in net metering has been on the rise. Between 2016 and 2017, Tucson Electric Power, Trico Electric Cooperative, and the state of Arizona all posted an increase in the number of net metering customers. Tucson Electric Power’s annual growth of 86.9% in net metering customers outpaced Trico Electric Cooperative and the state of Arizona which reported modest gains in comparison of 19.2% and 34.5% respectively. In 2017, the U.S. Energy Information Administration began to measure a new net metering option, virtual solar, where customers can belong or subscribe to a solar community and reap the benefits of solar net metering without having to install rooftop solar. Currently, within the state of Arizona, Trico Electric Cooperative and Salt River Project have virtual net metering customers. Visit the Energy Use Comparison page to explore the virtual net metering data.

Currently, six utilities in Arizona report net metering customers. In 2017, Arizona Public Service Company reported the largest number of net metering customers, with 6,805 per 100,000 customers, while Tucson Electric Power reported 4,555 net metering customers per 100,000.

In 2017, California far surpassed the other western states, with 5,723 net metering customers per 100,000. Arizona ranked second, with 4,184 net metering customers per 100,000, while Texas came in last. The number of residential net metering customers throughout the U.S. increased by 22.8% between 2016 and 2017 to 1,647,404 (EIA, Electric Power Annual 2017, Table 4.10). 

 

How is it measured?

The U.S. Energy Information Administration (EIA) reports data on the average price of electricity for the U.S., the states, and utility providers. Net metering data is reported to the EIA by each individual utility, which EIA compiles and publishes for the public. The EIA is the statistical and analytical agency within the U.S. Department of Energy. They collect, analyze, and disseminate information that covers the full spectrum of energy sources, end uses, and energy flows. Data is reported monthly and annually.