The New Electricity Squeeze: Where Power Costs Are Outpacing Wages

Electricity costs don’t exist in a vacuum; they’re part of a bigger financial picture that includes income, cost of living, and everyday expenses. Over the past decade, some households have seen their energy bills rise faster than their paychecks, making electricity harder to afford even when usage stays the same. By comparing electricity price trends with income growth across all 50 states, a clearer picture emerges of where Americans are feeling the most pressure. These findings highlight where energy is taking a larger share of household budgets and where residents are starting to fall behind.

Key Takeaways

• California, Massachusetts, and Rhode Island see the sharpest declines in electricity affordability over the past decade.
• Idaho, South Carolina, and Florida see the biggest affordability gains. Income growth far outpaces electricity price increases in all three, with South Carolina also seeing the nation’s largest drop in electricity’s share of household income (−1.44 pp).
• California’s electricity prices have risen 35 percentage points faster than incomes over the past decade, the largest gap in the country, costing households $836 more per year than in 2014.
• Only six of 51 states see electricity prices outpace income growth (CA, MA, RI, WV, CT, ME). In the other 45, paychecks keep pace or grow faster.

The Best and Worst States for Electricity Affordability

Where you live can make a big difference in how manageable your electricity bill feels over time. Comparing price growth to income growth helps reveal which states are becoming more affordable and which are falling behind.

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California experienced the largest affordability gap in the nation, with electricity prices growing 35 percentage points faster than incomes over the past decade. This imbalance added an extra $836 per year for households compared to 2014, putting significant pressure on monthly budgets.

Across the U.S., just six states saw electricity prices outpace income growth: California, Massachusetts, Rhode Island, West Virginia, Connecticut, and Maine. In the other 45 states, income growth kept up with or exceeded rising electricity costs, helping households maintain or improve affordability.

Regional patterns also stood out. The Northeast emerged as the most affected area, with five of the six states experiencing worsening affordability located in this region. Meanwhile, the Midwest remained steady, with all states falling into a “keeping pace” category and avoiding extreme shifts.

Some regions saw notable improvements. The Southeast led in reducing electricity’s share of household income, with South Carolina, Tennessee, Mississippi, Georgia, and Alabama all seeing meaningful declines. The Mountain West also performed well, as states like Idaho, Utah, Montana, Arizona, and Colorado ranked among the top for income growth outpacing electricity price increases.

Affordability isn’t always tied to the size of a bill. Hawaii had the highest average annual electricity cost at $2,545 but ranked mid-pack because income growth kept pace. In contrast, West Virginia had a lower average bill of $1,857, yet affordability lagged due to slower income growth.

The Sun Belt stood out as an overall bright spot. Florida, Georgia, Texas, Nevada, and Arizona all saw affordability gaps improve by more than 24 percentage points, driven by strong income growth and competitive energy markets.

The Growing Divide in Electricity Affordability

Electricity affordability has shifted unevenly across the country, with some states seeing real relief while others face growing pressure. In most places, incomes have kept pace with rising energy costs, but a small group of states continues to fall behind. Regional trends show that affordability challenges aren’t evenly distributed, making location a key factor in household energy costs. As prices and incomes continue to change, keeping an eye on this balance will be essential for managing long-term expenses.

Methodology

To determine where electricity is becoming harder to afford, we looked beyond high rates alone. We focused on where electricity prices are rising faster than household income. Our analysis covered residential electricity pricing, consumption, and income data across all 50 states and the District of Columbia over a 10-year period (2014–2024).

Data Sources

• Residential Electricity Prices & Consumption: U.S. Energy Information Administration, Form EIA-861 (Annual Electric Power Industry Report). We used average residential electricity prices (cents per kWh) and average annual consumption per residential customer (kWh) for each state.
• Median Household Income: U.S. Census Bureau, American Community Survey (ACS) 1-Year Estimates, Table B19013. We used median household income for each state in both the baseline year (2014) and the most recent available year (2024).

Key Metrics

• Affordability gap (percentage points). The difference between each state’s electricity price percentage change and its median household income percentage change over the study period. A positive value indicates electricity prices grew faster than income; a negative value indicates income kept pace or grew faster. For example, if a state’s electricity price rose 60% while income rose 40%, the affordability gap would be +20 percentage points.
• Annual electricity cost. Calculated by multiplying each state’s average residential electricity price by its average annual consumption per customer (price × kWh per customer) for 2024.
• Ten-year burden shift (percentage points). The change in electricity’s share of median household income between 2014 and 2024. We calculated each year’s burden as (annual electricity cost ÷ median household income) × 100, then subtracted the 2014 value from the 2024 value. A positive shift means electricity is consuming a larger share of income than it did a decade ago; a negative shift means the burden has eased.

Methodology Notes

• All percentage changes were calculated using the standard formula: ((new value − old value) ÷ old value) × 100.
• States were ranked by affordability gap in descending order (largest gap = most squeezed).
• We used median household income rather than average wages because it provides a more representative picture of typical household purchasing power and is less skewed by high earners.
• Consumption data from EIA Form 861 reflects actual usage patterns, which means states where households reduced their electricity usage in response to rising prices will show a smaller burden shift than the price increase alone would suggest.
• The District of Columbia is included alongside the 50 states for a total of 51 entries.

About Payless Power

Payless Power helps Texas residents take control of their electricity bills with prepaid energy plans that don’t require a credit check or deposit. Payless Power offers affordable, flexible electricity options to keep your home comfortable without breaking the bank.

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