Why is electricity so cheap in Alabama?
Alabama pays 16.40¢/kWh for residential electricity, 10.4% below the U.S. average of 18.31¢/kWh and the #28 lowest of 51 jurisdictions. At 900 kWh a month that is about $147.60, against $164.79 at the U.S. average.
Rates are EIA residential averages through July 2026, refreshed Sep 28, 2026. The U.S. average is the EIA U.S.-total residential price; rank and region figures compare the 51 jurisdiction averages.
How Alabama compares
| Measure | Alabama |
|---|---|
| Residential rate (EIA, July 2026) | 16.40¢/kWh |
| U.S. average (EIA) | 18.31¢/kWh |
| Difference | −10.4% (−1.91¢) |
| Rank among 51 jurisdictions | #24 highest (#28 lowest) |
| South average (17 states) | 16.24¢/kWh |
| Affordability tier | Very Affordable (index 90/100) |
| 12-month change | rose 3.0% (15.93¢/kWh → 16.40¢/kWh) |
| 5-year change | rose 24.0% (13.23¢/kWh → 16.40¢/kWh) |
See every state in one ranked table on electricity cost per kWh by state or the South region.
What the EIA series shows for Alabama
- Past 12 months (July 2025 → July 2026)
- The Alabama residential rate rose 3.0% (+0.47¢/kWh), from 15.93¢ in July 2025 to 16.40¢ in July 2026.
- Past 5 years (July 2021 → July 2026)
- The rate rose 24.0% (+3.17¢/kWh), from 13.23¢ in July 2021 to 16.40¢ in July 2026.
- Past 10 years (July 2016 → July 2026)
- The rate rose 36.3% (+4.37¢/kWh), from 12.03¢ in July 2016 to 16.40¢ in July 2026.
- Highest and lowest month on record
- In this series the Alabama rate peaked at 17.41¢/kWh in April 2026 and bottomed at 6.33¢/kWh in January 2001. The series covers January 2001 to July 2026.
- Steepest 12-month increase
- The largest single-year move in the series ended in December 2022: the rate rose 35.6% (+3.44¢/kWh), from 9.66¢ in December 2021 to 13.10¢ in December 2022. That is when the change happened; the series does not say what caused it.
- Against the rest of the country
- Over the same window the unweighted average across the 51 jurisdictions with data for this period rose 33.7%, so Alabama's +24.0% lagged the nationwide move by 9.8 percentage points. That gap is the part of the movement this dataset cannot attribute to a nationwide trend — it does not identify what else was involved.
- Rank among jurisdictions (July 2021 → July 2026)
- Measured over that identical five-year window, Alabama's change is the 33rd largest of the 51 jurisdictions whose series covers it — rank 1 is the biggest increase, rank 51 the biggest decrease. The rank places the movement; it does not explain it.
Between January 2001 and July 2026 the rate peaked at 17.41¢/kWh in April 2026 and bottomed at 6.33¢/kWh in January 2001.
Every month is charted on the Alabama electricity price history page, with the year-over-year table and the same measured facts.
What sits on top of the rate in Alabama
Alabama Power's standard residential tariff adds $16.00 a month before the first kilowatt-hour, 0.00¢/kWh in riders, for an all-in 16.74¢/kWh at 900 kWh.
The line items are on hidden electricity fees and taxes for Alabama.
What generally moves electricity rates
A rate series shows what changed, not why. This dataset records Alabama's residential rate and nothing about what moved it, and no reviewed Alabama driver analysis is published yet — so this page makes no causal claim. The factors that generally move retail rates are documented separately.
- Fuel and purchased power. Natural gas, coal, and wholesale power prices pass through to retail rates, often with a lag of months.
- Generation mix. Hydro and legacy nuclear tend to hold rates down; imported fuel, oil, and constrained supply tend to push them up.
- Wires investment. Transmission and distribution upgrades, storm hardening, and wildfire mitigation are recovered through rates over years.
- Market structure. Regulated utilities set rates in rate cases; deregulated markets price supply competitively and bill delivery separately.
- Demand and weather. Load growth, peak-heavy demand, and extreme weather raise the cost of serving each kilowatt-hour.
the factors themselves are documented on electricity generation cost drivers.
What the rate means for a Alabama bill
| Monthly usage | Alabama (16.40¢/kWh) | U.S. average (18.31¢/kWh) |
|---|---|---|
| 650 kWh | $106.60 | $119.01 |
| 900 kWh | $147.60 | $164.79 |
| 1,200 kWh | $196.80 | $219.72 |
| 1,600 kWh | $262.40 | $292.96 |
- Average electric bill in Alabama, by home size and city.
- Estimate a Alabama bill from your own usage.
- Why is my electric bill so high? When the rate is low but the bill is not.
Frequently asked questions
Why is electricity so cheap in Alabama?
Alabama pays 16.40¢/kWh for residential electricity, 10.4% below the U.S. average of 18.31¢/kWh and the #28 lowest of 51 jurisdictions. Over the past 12 months the rate rose 3.0% (15.93¢/kWh → 16.40¢/kWh), and over five years it rose 24.0% (13.23¢/kWh → 16.40¢/kWh). The EIA series records the rate and nothing about what moved it, and no reviewed Alabama driver analysis is published yet, so no cause is claimed here.
How does Alabama's electricity rate compare with the U.S. average?
16.40¢/kWh in Alabama against 18.31¢/kWh for the U.S. average (EIA, July 2026): 10.4% below, the #28 lowest of 51 jurisdictions. The South average across 17 states is 16.24¢/kWh. At 900 kWh a month that is about $147.60, against $164.79 at the U.S. average.
Is electricity in Alabama getting more expensive?
Over the past 12 months the rate rose 3.0% (15.93¢/kWh → 16.40¢/kWh), and over five years it rose 24.0% (13.23¢/kWh → 16.40¢/kWh). In EIA data from January 2001 to July 2026, the rate peaked at 17.41¢/kWh in April 2026 and bottomed at 6.33¢/kWh in January 2001. The full monthly series is on the Alabama electricity price history page.
How much is a typical electric bill in Alabama?
At 900 kWh a month that is about $147.60, against $164.79 at the U.S. average. 650 kWh: about $106.60; 900 kWh: about $147.60; 1,200 kWh: about $196.80; 1,600 kWh: about $262.40. Alabama Power's standard residential tariff adds $16.00 a month before the first kilowatt-hour, 0.00¢/kWh in riders, for an all-in 16.74¢/kWh at 900 kWh.