Electricity rates represent the cost per kWh charged by utilities to consumers. Rates differ by customer class: residential customers typically pay the highest rates because they consume smaller volumes at lower voltages, requiring more distribution infrastructure per kWh. Commercial rates are generally lower, and industrial rates are the lowest because large industrial consumers use power at higher voltages with more predictable demand patterns. Rates are set by state public utility commissions and reflect generation costs, transmission, distribution, and regulatory charges.
Electricity Rate
The price charged per kilowatt-hour of electricity, varying by customer class (residential, commercial, industrial).
Related Terms
Kilowatt-Hour (kWh)
A unit of energy equal to using 1,000 watts for one hour, the standard billing unit for electricity.
Tiered Pricing
A rate structure where the price per kWh increases as consumption rises above set thresholds.
Time-of-Use (TOU) Rates
Pricing that varies by time of day, with higher rates during peak demand hours and lower rates off-peak.