Electricity Prices By Year And Adjusted For Inflation

The average cost of electricity per kilowatt hour was 17.3 cents in January, after being 16.9 cents previously, according to data published Feb. 13, 2024, by the U.S. Labor Department’s Bureau of Labor Statistics (BLS).

In averaging the BLS’s monthly pricing data for electricity by calendar year, the price per kilowatt hour was 16.8 cents in 2023 versus 15.9 cents in 2022, marking a 5.7% increase.

The chart above and table below lists the average annual prices of electricity since 1979 and shows those prices adjusted for inflation in 2022 dollars.

Inflation Adjusted Electricity Prices (1979-2022)

Category: Electricity per kWh

Year Average Electricity Prices by Year* Average Annual CPI for Electricity** Electricity Prices Adjusted for Inflation in 2022 Dollars
1979 $0.050 65.600 $0.193
1980 $0.060 75.800 $0.200
1981 $0.069 87.200 $0.200
1982 $0.076 95.800 $0.201
1983 $0.078 98.900 $0.200
1984 $0.082 105.300 $0.197
1985 $0.081 108.900 $0.188
1986 $0.077 110.400 $0.177
1987 $0.079 110.000 $0.182
1988 $0.080 111.500 $0.182
1989 $0.082 114.700 $0.181
1990 $0.084 117.400 $0.181
1991 $0.087 121.800 $0.181
1992 $0.088 124.200 $0.179
1993 $0.092 126.700 $0.184
1994 $0.092 126.700 $0.184
1995 $0.094 129.600 $0.184
1996 $0.094 131.800 $0.181
1997 $0.094 132.500 $0.180
1998 $0.087 127.400 $0.173
1999 $0.086 126.500 $0.172
2000 $0.087 128.500 $0.171
2001 $0.092 137.800 $0.169
2002 $0.091 136.200 $0.169
2003 $0.093 139.500 $0.169
2004 $0.094 142.100 $0.167
2005 $0.100 150.800 $0.168
2006 $0.112 169.200 $0.168
2007 $0.117 175.825 $0.168
2008 $0.123 187.146 $0.166
2009 $0.127 192.712 $0.167
2010 $0.128 193.095 $0.168
2011 $0.130 196.737 $0.167
2012 $0.130 196.630 $0.167
2013 $0.132 200.750 $0.166
2014 $0.137 208.020 $0.167
2015 $0.138 209.191 $0.167
2016 $0.135 206.983 $0.165
2017 $0.138 211.437 $0.165
2018 $0.136 212.932 $0.162
2019 $0.136 213.362 $0.161
2020 $0.135 214.615 $0.159
2021 $0.141 223.892 $0.159
2022 $0.159 253.127 $0.159

*Data Source: U.S. Bureau of Labor Statistics: 12-Month Average Electricity per kWh in U.S. city average, average price, not seasonally adjusted. CPI Average Price Data.

**Data Source: U.S. Bureau of Labor Statistics: 12-Month Average Electricity in U.S. city average, all urban consumers, not seasonally adjusted. CPI-All Urban Consumers.

Electricity in the CPI

Electricity is one of the pricing items collected by the BLS and monitored for inflation as a part of the Consumer Price Index (CPI). Electricity rates are more stable than prices for companion items like gasoline and fuel oil, but it still falls under the BLS’s main "Energy index." Therefore, although electricity costs are used along with many other goods and services in measuring overall inflation, keep in mind that they are completely discounted in calculating core inflation rates.

How are electricity prices affected by inflation? Less so than many other goods and services purchased by American consumers. As an example, the cost of electricity climbed from an average of 8.1 cents per kilowatt hour in 1985 to 13.5 cents in 2020, marking a 66.7% rate of increase in 35 years. That’s a sizable gain but, interestingly, plugging 8.1 cents and the two years into this site’s Inflation Calculator finds that electricity prices during the time increased slower than the rate of overall inflation. The often-reported overall inflation rate is calculated from measuring pricing changes over thousands of items — not just electricity rates. Overall inflation places 8.1 cents in 1985 at 19 cents in 2020 for a 140.5% rate increase.

How to Adjust Electricity Prices for Inflation

In calculating electricity prices for inflation adjustment, we’ll use an example that shows how to adjust them from 1979 to 2022. First, consider these facts which are shown in the table above:

  • The average price for Electricity in 1979 was $0.050 per kilowatt hour.
  • The annual average CPI for Electricity in 1979 was 65.600.
  • The annual average CPI for Electricity in 2022 was 253.127.

The following formula shows how to adjust gasoline for inflation:

1979 Electricity Price x (2022 CPI for Electricity / 1979 CPI for Electricity) = Adjusted Electricity Price in 2022 Dollars

Using the actual numbers:

$0.050 x (253.127/65.600) = 19.3 cents per kWh