The average cost of electricity per kilowatt hour was 14.4 cents in August 2021, rising a bit from the price of 14.3 cents in July, according to data published September 14 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 13.5 cents in 2020 versus 13.6 cents in 2019, marking a 0.7% decline.
The chart above and table below lists the average annual prices of electricity since 1979 and shows those prices adjusted for inflation in 2020 dollars.
Inflation Adjusted Electricity Prices (1979-2020)
Category: Electricity per kWh
| Year | Average Electricity Prices by Year* | Average Annual CPI for Electricity** | Electricity Prices Adjusted for Inflation in 2020 Dollars |
| 1979 | $0.050 | 65.600 | $0.164 |
| 1980 | $0.060 | 75.800 | $0.170 |
| 1981 | $0.069 | 87.200 | $0.170 |
| 1982 | $0.076 | 95.800 | $0.170 |
| 1983 | $0.078 | 98.900 | $0.169 |
| 1984 | $0.082 | 105.300 | $0.167 |
| 1985 | $0.081 | 108.900 | $0.160 |
| 1986 | $0.077 | 110.400 | $0.150 |
| 1987 | $0.079 | 110.000 | $0.154 |
| 1988 | $0.080 | 111.500 | $0.154 |
| 1989 | $0.082 | 114.700 | $0.153 |
| 1990 | $0.084 | 117.400 | $0.154 |
| 1991 | $0.087 | 121.800 | $0.153 |
| 1992 | $0.088 | 124.200 | $0.152 |
| 1993 | $0.092 | 126.700 | $0.156 |
| 1994 | $0.092 | 126.700 | $0.156 |
| 1995 | $0.094 | 129.600 | $0.156 |
| 1996 | $0.094 | 131.800 | $0.153 |
| 1997 | $0.094 | 132.500 | $0.152 |
| 1998 | $0.087 | 127.400 | $0.147 |
| 1999 | $0.086 | 126.500 | $0.146 |
| 2000 | $0.087 | 128.500 | $0.145 |
| 2001 | $0.092 | 137.800 | $0.143 |
| 2002 | $0.091 | 136.200 | $0.143 |
| 2003 | $0.093 | 139.500 | $0.143 |
| 2004 | $0.094 | 142.100 | $0.142 |
| 2005 | $0.100 | 150.800 | $0.142 |
| 2006 | $0.112 | 169.200 | $0.142 |
| 2007 | $0.117 | 175.825 | $0.143 |
| 2008 | $0.123 | 187.146 | $0.141 |
| 2009 | $0.127 | 192.712 | $0.141 |
| 2010 | $0.128 | 193.095 | $0.142 |
| 2011 | $0.130 | 196.737 | $0.142 |
| 2012 | $0.130 | 196.630 | $0.142 |
| 2013 | $0.132 | 200.750 | $0.141 |
| 2014 | $0.137 | 208.020 | $0.141 |
| 2015 | $0.138 | 209.191 | $0.142 |
| 2016 | $0.135 | 206.983 | $0.140 |
| 2017 | $0.138 | 211.437 | $0.140 |
| 2018 | $0.136 | 212.932 | $0.137 |
| 2019 | $0.136 | 213.362 | $0.137 |
| 2020 | $0.135 | 214.615 | $0.135 |
*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 components watched by the BLS for inflation and a part of its Consumer Price Index (CPI). While electricity rates are more stable than prices for companion items like gasoline and fuel oil, the category 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, 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 2020. 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 1978 was 65.600.
- The annual average CPI for Electricity in 2020 was 214.615.
The following formula shows how to adjust gasoline for inflation:
1979 Electricity Price x (2020 CPI for Electricity / 1979 CPI for Electricity) = Adjusted Electricity Price in 2020 Dollars
Using the actual numbers:
$0.0503 x (214.615/65.600) = 16.4 cents per kWh