US Commercial Electricity Rates: 2026 State-by-State Analysis
Commercial electricity rates across the United States are diverging sharply based on regional utility structures and generation mix. For 2026, fully deregulated markets like Texas (ERCOT) provide decisive competitive advantages versus high-cost capacity markets like New England (ISO-NE) or intensely regulated geographies like California (CAISO), where transmission upgrades and thermal retirements continue driving C&I rates upward.
Executive Impact
- →The Geographic Arbitrage: Enterprises with a multi-state footprint can leverage electricity cost differentials. Shifting server workloads or heavy manufacturing to sub-10¢/kWh states yields immediate OPEX reductions.
- →The Deregulation Premium: States offering full retail electric choice (like PA, OH, IL, TX) allow businesses to decouple from utility infrastructure inflation by securing wholesale-direct fixed hedges.
- →Transmission is the New Generation: Across almost all 50 states, the fastest-growing portion of the commercial bill is no longer raw energy (LMP), but the regulated delivery costs required to build out high-voltage transmission networks.
Navigating the 2026 National Landscape
The "National Average" commercial electricity rate (roughly 12.56¢ per kWh according to recent EIA data smoothing) is largely a mathematical fiction for commercial buyers. Actual rates paid by businesses are heavily balkanized by state lines, ISO/RTO footprints, and local regulatory environments.
A medium-sized manufacturing facility using 2 million kWh annually might pay $180,000 per year in Texas, but the exact same facility utilizing the same load profile could easily face a $420,000 annual electric bill if relocated to Massachusetts or California.
| Market Tier | Representative States | Avg. Commercial Cost |
|---|---|---|
| Tier 1: Low Cost / Favorable | Texas, Oklahoma, Utah, Idaho | 7.5¢ - 9.5¢ / kWh |
| Tier 2: National Median | Pennsylvania, Ohio, Illinois, Florida | 10.0¢ - 13.0¢ / kWh |
| Tier 3: Elevated Cost | New York, New Jersey, Maryland | 14.0¢ - 17.0¢ / kWh |
| Tier 4: Extremely High | California, Massachusetts, Hawaii | 18.0¢ - 35.0¢+ / kWh |
*EIA commercial baseline rates average. Fully blended to include both supply and delivery components.
Three Trends Defining State-Level Pricing
1. The Capacity Market Squeeze (East Coast): States operating within the PJM Interconnection (PA, NJ, MD, OH) and ISO-NE (MA, CT) are seeing their supply rates surge purely due to capacity clearing prices. As baseload coal and nuclear plants retire faster than renewables can reliably replace them, grid operators are forced to pay massive premiums to ensure dispatchable power remains online, inflating the commercial supply rate.
2. The Deregulated Advantage (Midwest/Texas): States that allow commercial choice provide a distinct operational advantage. A facility in Dallas (Texas) or Chicago (Illinois) can strategically execute index-based, block-and-index, or fixed-price contracts to navigate around temporary wholesale spikes, a flexibility denied to their peers in regulated monopolies like Florida or the Carolinas.
3. The Wildfire & Transmission Premium (West Coast): In states like California, the underlying generation costs are actually quite low during peak solar hours. However, the regulated delivery costs required to harden the grid against wildfires, build massive transmission lines to remote wind/solar farms, and fund state-mandated decarbonization programs make California one of the most hostile energy environments for commercial industry in the nation.
Source: U.S. Energy Information Administration (eia.gov) Form EIA-861M.
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