Electric Bill Rates - Why 1 kWh Has 4 Prices (2026 Data)
Two neighbors. Same utility. Same rate plan. Same 500 kilowatt-hours in the same August.
One pays $186.61. The other pays $211.44.
Neither of them did anything wrong. They just live in different baseline territories.
If you've ever looked at a summer electric bill and thought "I didn't use that much more than last month," this is the article for you. I went into the actual filed tariffs — the CPUC documents utilities have to publish, not the marketing pages — and ran the numbers.
What I found is that there is no such thing as "your electric rate." There are four of them, sometimes six, and which one you pay depends on the hour of the day, the month of the year, and your ZIP code.
Let's take it apart.
There is no "U.S. electricity price" — and that's the first problem
The national average is 18.44 cents per kWh. It describes almost nobody.
According to the EIA's Electric Power Monthly (Table 5.6.A, May 2026 data, released July 23, 2026), here's the actual spread:
| State | Residential price (¢/kWh, May 2026) |
|---|---|
| Hawaii | 52.00 |
| California | 33.25 |
| New York | 29.93 |
| U.S. average | 18.44 |
| Texas | 16.44 |
| Washington | 14.95 |
| Louisiana | 14.15 |
| Idaho | 12.35 |
Hawaii pays 4.2 times what Idaho pays for the identical commodity.
And these are averages, which is the polite way of saying they hide everything interesting. Inside a single utility, one customer's marginal price can swing by a factor of two on a single Tuesday.
That's what the rest of this article is about.
Surprise: U.S. tiered rates barely punish heavy users
This is the finding that flipped my assumption, so I'll lead with it. In California, tiered pricing is almost flat.
Everybody "knows" that tiered rates punish you for using more. Here's what PG&E's filed Schedule E-1 tariff actually says, effective June 1, 2026 (Cal. P.U.C. Sheet No. 61362-E, Advice 7921-E, D.26-04-036):
| Component | Rate |
|---|---|
| Tier 1 (0–100% of baseline) | $0.32561/kWh |
| Tier 2 (101%–400% of baseline) | $0.40702/kWh |
| Usage over 400% of baseline | $0.40702/kWh — the same |
| Base Services Charge, Income Tier 3 (most households) | $0.79343/day (about $23.80/month) |
| California Climate Credit | –$36.18 per household, applied in the August and September bill cycles |
Read that third row again. There is no punitive top tier. Blow past 400% of your baseline allowance and PG&E charges you the exact same 40.702 cents.
The Tier 1 to Tier 2 jump is only 25%. PG&E's consumer rate card rounds it to 33¢ and 41¢.
So what does that do to a bill? Here's the same rate plan modeled at four usage levels (territory X, 294 kWh monthly baseline, Income Tier 3, 30-day summer month):
| Usage | Bill | Effective rate |
|---|---|---|
| 300 kWh | $121.97 | 40.7¢/kWh |
| 500 kWh | $203.38 | 40.7¢/kWh |
| 700 kWh | $284.78 | 40.7¢/kWh |
| 900 kWh | $366.19 | 40.7¢/kWh |
A flat line. Triple your usage, triple your bill. Once you're past baseline, the "tier" stops mattering.
There's also a structural change worth noticing in 2026: PG&E now charges a monthly Base Services Charge, with that revenue "used to reduce their $ per kWh energy rates," and sorts households into three income tiers based on Federal Poverty Guideline thresholds. That's California's income-graduated fixed charge — and it makes your bill less proportional to how much you use, not more.
So if tiering isn't where the nonlinearity lives, where is it?
Your ZIP code quietly decides how much Tier 1 electricity you get
Baseline isn't a fixed number of kilowatt-hours. It's a daily allowance that changes by territory, season, and heating type.
PG&E's tariff sets baseline quantities per day, and the range is wider than most people expect. Summer daily baseline, Code B (basic, non-electric-heat):
| Territory | Summer basic (kWh/day) |
|---|---|
| W (hot inland) | 19.2 |
| R | 17.7 |
| S | 15.0 |
| P | 13.5 |
| Y | 10.5 |
| Q / X | 9.8 |
| V | 7.1 |
| T | 6.5 |
| Z (cool coastal) | 5.9 |
The hottest inland territory gets 19.2 kWh/day at the cheap Tier 1 price. The coolest coastal one gets 5.9. That's a 3.3x difference in how much discounted electricity you're handed before you even turn anything on.
Now back to those two neighbors from the intro. Same 500 kWh, same plan, same month:
| Baseline territory | Monthly baseline | Bill | Effective rate |
|---|---|---|---|
| T (6.5 kWh/day) | 195 kWh | $211.44 | 42.3¢/kWh |
| X (9.8 kWh/day) | 294 kWh | $203.38 | 40.7¢/kWh |
| P (13.5 kWh/day) | 405 kWh | $194.34 | 38.9¢/kWh |
| R (17.7 kWh/day) | 531 kWh | $186.61 | 37.3¢/kWh |
A $24.83 spread — about 13% — for identical behavior.
Have you ever compared your bill to a friend's across town and been confused? This is probably why.
The real trap: one kilowatt-hour, four different prices
Here's the core of the whole thing. On PG&E's E-TOU-C plan, a single summer kilowatt-hour has four prices at once.
It happens because two systems stack. The time-of-use window sets a base price, and then a baseline credit of –$0.08140/kWh gets applied only to the portion of your usage that fell inside baseline.
From the filed E-TOU-C tariff, effective June 1, 2026:
| Same 1 kWh, summer | Price |
|---|---|
| Off-peak, within baseline | 31.8¢ |
| Off-peak, above baseline | 39.9¢ |
| Peak (4–9 p.m.), within baseline | 44.1¢ |
| Peak, above baseline | 52.2¢ |
A 1.64x spread. Same month. Same meter. Same rate plan.
Stretch it across seasons and it gets wider: winter off-peak within baseline is 28.6¢, against summer peak above baseline at 52.2¢. That's 1.83x for the identical physical unit of energy.
This is the honest answer to "why can't I predict my bill." To price a single kilowatt-hour, you would need to know:
- Which of roughly ten baseline territories you're in
- How many days are in this billing cycle
- What share of your usage landed inside the 4–9 p.m. window
- Whether you crossed baseline
Nobody knows all four in real time. That's not a personal failing — it's the structure.
Why 4 to 9 p.m., specifically?
The CPUC ordered California's investor-owned utilities to move residential customers onto time-of-use plans starting in 2019, following the Residential Rate Reform decision responding to AB 327.
The reasoning is about the grid, not about punishing you. Demand peaks in the late afternoon and early evening — right as solar generation tapers off — so electricity in that window "is less available and thus costs more to produce."
Everyone comes home, turns on the AC, and the sun clocks out. That's the whole story.
How much does timing actually move the bill?
Here's the same 600 kWh, with only the when changing (E-TOU-C, territory X, Income Tier 3, 30-day summer month):
| Share of usage in 4–9 p.m. peak | Bill | Effective rate |
|---|---|---|
| 5% | $243.20 | 40.5¢/kWh |
| 10% | $246.89 | 41.1¢/kWh |
| 20% | $254.27 | 42.4¢/kWh |
| 30% | $261.65 | 43.6¢/kWh |
| 40% | $269.03 | 44.8¢/kWh |
$25.83 a month — 10.6% — purely from timing. Not from using less. From using the same amount at different hours.
How steep can peak pricing get? Steeper than you'd guess
If you drive an EV, the spread more than doubles.
From PG&E's official consumer rate card effective March 1, 2026 (prices "estimated to the nearest one cent"):
| Plan | Peak window | Summer peak | Summer off-peak | Ratio |
|---|---|---|---|---|
| Tiered (E-1) | n/a | 41¢ | 33¢ | 1.24x |
| E-TOU-C | 4–9 p.m. daily | 52¢ | 40¢ | 1.30x |
| E-TOU-D | 5–8 p.m. weekdays | 48¢ | 34¢ | 1.41x |
| E-ELEC | 4–9 p.m. | 55¢ | 33¢ | 1.67x |
| EV2-A | 4–9 p.m. | 54¢ | 23¢ | 2.35x |
| EV-B | 2–9 p.m. | 62¢ | 26¢ (12–7 a.m.) | 2.38x |
On EV-B, one kilowatt-hour is 62 cents at 5 p.m. and 26 cents at 3 a.m. Same wire, same house, same day.
And notice how season compresses everything: E-TOU-D runs 48¢/34¢ in summer (1.41x) but 39¢/35¢ in winter (1.11x). The same rate plan behaves like a different product depending on the month.
The strange part: the price signal you get is weaker than the real cost
Underneath the retail rate, the actual cost gap between peak and off-peak power is far bigger than what shows up on your bill.
Central Coast Community Energy (3CE), a public community choice aggregator, publishes its generation charges in SCE territory (effective February 15, 2026). Looking only at the generation component:
- TOU-D (4–9 p.m.): summer on-peak $0.25448 vs off-peak $0.07360 — about 3.5x
- TOU-D (5–8 p.m.): summer on-peak $0.41297 vs off-peak $0.06285 — about 6.6x
- TOU-D-PRIME: $0.29667 vs $0.07049 — about 4.2x
- Winter super-off-peak on these schedules: $0.05958–$0.08364
⚠️ Important caveat: these are generation-only charges from a CCA, not full bundled retail rates. Delivery charges get stacked on top, and delivery is largely flat.
But that dilution is the story. The generation cost of a peak kilowatt-hour runs 3 to 6 times an off-peak one, while the bundled retail price you actually see only moves by about 1.3x to 2.4x. Flat delivery and fixed charges sit underneath and mute the signal.
So the system asks you to shift your laundry to 10 p.m. while showing you only a fraction of the reason why.
Texas flips the whole thing: use less, pay more
In California the penalty is for using too much. In Texas, on some plans, the penalty is for using too little.
Texas requires every retail plan to publish an Electricity Facts Label showing the average price per kWh at exactly 500, 1,000, and 2,000 kWh of monthly usage, under PUC Substantive Rule 25.475. That average "includes energy, delivery, and any bill credits, monthly charges or tiered rates that are included in the plan."
Here's the part almost nobody reads: those three numbers are "not unit prices and do not correspond to a range of energy usage. Instead, they tell you the price you will pay at a specific level of usage."
Which means the headline rate you shopped on is a single point, not a curve. And if you know exactly where the measuring stick lands, you can engineer a plan to look great at that one point.
That's what bill credit plans do. Retailers "offer bill credits strategically at exactly 500, 1000 or 2000 kWh to create a low advertised rate per kWh."
A worked example reported by industry analysts:
- At exactly 1,000 kWh: the plan advertises 7.4¢/kWh
- The underlying energy charge is about 20.4¢/kWh (visible at 500 kWh, where no credit applies)
- At 950 kWh — missing the threshold by 5% — you pay the full 20.4¢ on every kWh, for an effective total of roughly 25¢/kWh including delivery
Miss the threshold by 5%, and your effective price roughly doubles.
Think about what that incentivizes. On a hot day in August, when you should be conserving, the rational move is to leave the lights on so you clear 1,000 kWh.
EnergyBot, a commercial comparison site that analyzed actual costs paid by more than 500 Texas residents, reported that bill credit plans ran on average 34% more expensive per kWh than traditional plans, costing customers about $816 more per year.
⚠️ Attribute that one carefully: EnergyBot is a broker with an incentive to steer people toward fixed-rate plans, so I'd treat the 34%/$816 figure as a single-vendor study rather than an independent finding. The structural mechanism — credits placed exactly at the disclosure points — is corroborated by the PUCT rule itself and by TXU Energy, an incumbent retailer.
Worth noting: Texas's average residential price of 16.44¢/kWh is below the U.S. average and roughly half California's 33.25¢. Cheap averages, unpredictable individual bills. In California the complexity is public and filed with the CPUC. In Texas it's on page two of a document most customers never open.
Why your 2026 bill is up even if you changed nothing
Structure explains the shape of your bill. It doesn't explain why the whole curve is moving up.
Utility Dive reported on January 30, 2026 that customers "should not expect electric bill relief in 2026." The numbers behind that:
- National average projected at about 18¢/kWh in 2026 — roughly +37% since 2020
- Household energy arrearages rose 31% between December 2023 and June 2025
- Forced disconnections: 3 million (2023) → 3.5 million (2024) → 4 million projected (2025)
- Annual transmission spending averaging $154 billion, with a total consumer cost of about $1.8 trillion over five years once FERC incentives and financing are included
- In the PJM capacity auction, data center load accounted for $6.5 billion of $16.4 billion — 40% of the total
- EIA demand growth forecasts: 1% in 2026, 3% in 2027
EIA's Short-Term Energy Outlook puts 2026 residential prices at 18.02¢/kWh, up from 17.29¢ in 2025 (+4.2%), with New England around 30.01¢ and the Pacific region at 24.88¢.
For context, here's how average summer bills have tracked (EIA STEO, August 2025 edition):
| Year | Summer usage (kWh/month) | Price (¢/kWh) | Average summer bill |
|---|---|---|---|
| 2022 | 1,098 | 15.48 | $170 |
| 2023 | 1,047 | 15.94 | $167 |
| 2024 | 1,087 | 16.54 | $180 |
| 2025 (forecast) | 1,064 | 17.41 | $185 |
Two 2026-specific items also hit household bills this summer: a $13 monthly federal tax-relief credit expired May 31, 2026, and regional capacity auction charges reset each June 1 on top of newly approved delivery rate increases.
Newsweek (May 28, 2026) named Connecticut, Massachusetts, Hawaii, Rhode Island and California as the highest-cost states, with the Mid-Atlantic, New York and New England facing the steepest expected summer prices. It cited "$800-plus summer power bills" as an illustration of the household burden, and quoted Kevin Thompson of 9i Capital Group saying that "much of the increase is not the energy itself but delivery charges and approved utility rate hikes."
⚠️ Honestly, here's what I couldn't verify
I'd rather tell you the limits than pretend the whole picture is airtight.
1. SCE and SDG&E numbers are secondhand. I could not retrieve their own filed tariff sheets — SCE's tariff library didn't resolve and SDG&E's regulatory PDF returned a 403 error. Secondary sources report SCE's TOU-D-4-9PM at roughly 58¢/kWh summer on-peak vs 24¢ off-peak (with a ~10¢ baseline credit), and SDG&E's TOU-DR1 at 69.65¢ on-peak vs 47.56¢ off-peak. Several of those figures come from solar-industry sites, which have a commercial interest in emphasizing high peak rates. Treat them as reported, not confirmed. Everything I stated as fact about PG&E comes straight from filed CPUC tariffs.
2. The SCE peak number conflicts with itself across sources — 58.3¢ in one post, 49¢ in another, and $0.25448 as a generation-only component from 3CE's official sheet. Bundled vs. generation-only, different TOU schedules, and whether the baseline credit is netted out all pull the number in different directions. There isn't one right answer to quote.
3. The 2025 summer bill average moves depending on which STEO vintage you pull — $185 in the August 2025 edition, $178 in a later summary. EIA revises monthly as actual data replaces forecast, so pin the edition date to the number or skip the decimal precision.
4. All PG&E simulations here assume a 30-day summer month and Income Tier 3. Your billing cycle length and income tier will move the result.
Frequently asked questions
Q. If I use a lot of electricity in California, do I get pushed into an expensive top tier?
A. On PG&E's E-1 schedule, no. The filed tariff prices usage over 400% of baseline at $0.40702 — identical to Tier 2. There is no punitive third tier. The steep pricing in California lives in time-of-use windows, not in usage tiers.
Q. What exactly is "baseline"?
A. A daily allowance of lower-priced electricity, set by your baseline territory, the season, and whether your home is all-electric. Summer basic allowances range from 5.9 to 19.2 kWh/day depending on territory. Your bill or your utility's territory lookup will tell you which one you're in.
Q. Is a time-of-use plan cheaper than a tiered plan?
A. It depends entirely on what share of your usage lands in the peak window. Identical 600 kWh months on E-TOU-C ranged from $243.20 (5% peak usage) to $269.03 (40% peak usage). If you're home and running AC from 4 to 9 p.m. every day, TOU works against you.
Q. Why is the peak window 4 to 9 p.m. instead of noon, when it's hottest?
A. Because it's about the grid, not the thermometer. Demand peaks in the late afternoon and early evening exactly as solar generation drops off, which is when power costs the most to produce.
Q. Is the advertised rate on a Texas plan what I'll actually pay?
A. Only if you use exactly 500, 1,000 or 2,000 kWh. Those three disclosure points are "not unit prices and do not correspond to a range of energy usage." On a bill credit plan, landing at 950 kWh instead of 1,000 can take your effective price from about 7.4¢ to roughly 25¢.
Q. Is there any good news on my August bill?
A. If you're a PG&E residential customer, yes — the California Climate Credit of $36.18 per household is applied in the August and September bill cycles.
One thing to do this week
Skip the big conservation plan for now. Do this instead.
Go find two numbers: your baseline territory letter, and the share of your usage that falls between 4 and 9 p.m.
Both are on your utility account, and it takes about five minutes.
Because that's the real takeaway here. The question isn't "am I using too much electricity?" It's "which of my four prices am I paying, and how often?"
If you're in a low-baseline territory with heavy evening usage, you're paying 52.2¢ for power your neighbor buys at 31.8¢. Shifting a dishwasher and a laundry load past 9 p.m. is worth more than a month of guilt about the thermostat.
One sentence to take with you:
Your electric bill isn't a measure of how much you used. It's a measure of how much you used, when you used it, and where you happened to be standing.
How does yours look this summer?
- Way higher than I expected 😮💨
- About what I planned for 😌
- Haven't opened it yet 🙈
Drop a 1, 2 or 3 in the comments 😊
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※ All PG&E figures come from filed CPUC tariffs (Schedule E-1 and E-TOU-C, effective June 1, 2026) and PG&E's consumer rate card effective March 1, 2026. Bill simulations assume a 30-day summer month, Income Tier 3, and the stated baseline territory; your actual bill will vary with cycle length, income tier, and any credits applied.
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