Verdict: the gap is real, but ownership alone does not explain it.
A new analysis based on final 2025 U.S. Energy Information Administration Form EIA-861 data shows that residential customers at investor-owned utilities paid an average 17.8 cents per kWh, compared with 14.5 cents at public utilities and 14.1 cents at cooperatives. That is a 22.7% national price gap between investor-owned and public utilities. The number is useful, but it should be read carefully: it measures what customers paid on average, not a universal tariff, and it does not by itself prove that ownership type caused the difference.
What the number means — dated 2025 data: average residential price, not a guaranteed bill; based on revenue divided by kWh sold; excludes federal and the smallest utilities; retail-choice states can complicate coverage.
What the 2025 data shows
The clearest headline is simple: investor-owned utilities were more expensive on average for residential customers in 2025. But the broader picture is more complicated. Prices have moved differently since 2020, monthly bills depend on usage, and utility ownership is only one of several factors that can shape what households pay.
- 2025 average residential price: investor-owned 17.8¢/kWh; public 14.5¢/kWh; cooperative 14.1¢/kWh.
- Since 2020: investor-owned prices rose 34%; public and cooperative prices rose 19%; CPI inflation rose 24% (BLS CPI).
- National public-versus-investor-owned gap: 22.7%.
- Excluding hydro-heavy public-power states: 19.8%.
- Comparing investor-owned and nonprofit utilities within the same state: 17.3%.
- Average monthly bill: investor-owned $146; public $130; cooperative $159.
- Reliability data excluding major storms: 120 average outage minutes for investor-owned; 80 for public; 166 for cooperatives.
Compact comparison table
The table below summarizes the headline figures from the Kadoa analysis, which is based on EIA-861 data and related methodology notes. The underlying repository and data are available for review, and the limitations matter as much as the averages themselves.
- Investor-owned utilities: 17.8¢/kWh; average bill $146; +34% since 2020; 120 outage minutes.
- Public utilities: 14.5¢/kWh; average bill $130; +19% since 2020; 80 outage minutes.
- Cooperatives: 14.1¢/kWh; average bill $159; +19% since 2020; 166 outage minutes.
Source links: Kadoa analysis and downloadable data (https://www.kadoa.com/energy-prices/insights/investor-owned-utilities), Kadoa methodology and limitations (https://www.kadoa.com/energy-prices/about), the official EIA-861 annual data page (https://www.eia.gov/electricity/data/eia861/), the open project repository (https://github.com/kadoa-org/energy-prices), and the BLS CPI page (https://www.bls.gov/cpi/).
Why price and bill are not the same thing
A household’s average price per kWh is only one side of the story. The monthly bill also depends on how much electricity the household uses. That is why a lower rate does not automatically produce a lower bill. The 2025 data illustrates this point clearly: cooperative customers had the lowest average price at 14.1¢/kWh, yet their average monthly bill was the highest at $159 because they used more electricity on average.
Worked example: imagine two households each face a different utility structure. Household A pays 17.8¢/kWh and uses 820 kWh in a month. Household B pays 14.1¢/kWh but uses 1,130 kWh. Household A’s energy charge would be about $146. Household B’s would be about $159. This simplified comparison shows why rate comparisons alone can mislead if usage is ignored. Real bills can also include fixed fees, taxes, riders, and time-of-use charges.
Why the ownership comparison is useful, and its limits
Comparing investor-owned, public, and cooperative utilities is useful because ownership models often come with different financing structures, tax treatment, governance, and regulatory incentives. Kadoa’s methodology explicitly says the data show what customers paid, not why. Public utilities may benefit from tax or borrowing advantages, while generation mix, local weather, investment cycles, regulatory rules, and customer usage patterns can all affect rates and bills.
That means the 22.7% gap should be treated as a descriptive finding, not as proof of causation. It tells readers that national averages differ meaningfully across utility types, but not that ownership type alone explains the entire difference. The same caution applies when comparing states, because a hydro-heavy state, a fast-growing Sun Belt market, or a storm-prone coastal region can look very different even before ownership enters the picture.
There is also a coverage issue. The measure is revenue divided by kilowatt-hours sold, not a universal tariff available to every household. Federal utilities and the smallest utilities are excluded, and retail-choice states create additional complications because some customers buy generation from a supplier while still paying the local utility for delivery.
How to compare your own electricity costs: 8 checks
- Total kWh used: check how much electricity you consumed, not just what you paid.
- Supply rate: look for the energy or generation price per kWh.
- Delivery charges: compare transmission and distribution costs separately if they are listed.
- Fixed fees: monthly customer charges can matter a lot for low-usage homes and small firms.
- Time-of-use pricing: peak and off-peak windows can change the true cost of power.
- Taxes and credits: state, local, and fuel-related adjustments can move the final bill.
- Ownership and regulator: investor-owned, public, and cooperative structures often answer to different rules.
- Reliability: fewer outages may justify a higher rate for some households and businesses.
What businesses should watch
For power-intensive operations, the relevant metric is rarely cents per kWh alone. Small businesses, factories, cold storage operators, and data centers should examine demand charges, contract terms, outage risk, and the local pace of grid upgrades. A utility with a lower average rate can still be expensive for a business if peak-demand charges are high or if reliability problems create downtime.
Data centers and other large users should pay special attention to how utilities recover new transmission and generation investments, how quickly rate cases move through state regulators, and whether local service territory growth is forcing major capital spending. Those factors can affect future bills even when today’s average residential rate looks stable.
A 3-to-12 month outlook
Over the next 3 to 12 months, the most likely drivers of change are pending rate cases, fuel cost adjustments, utility investment plans, and the next round of EIA updates. Because the 2025 dataset is already an annual snapshot, the near-term question is less about whether the national gap exists and more about whether it narrows or widens as new filings and updated data arrive.
The outlook remains uncertain. If inflation pressures ease but utilities continue to seek higher base rates for poles, wires, and generation upgrades, some prices could still rise faster than consumer inflation. On the other hand, fuel costs, mild weather, or regulatory decisions could slow increases in some regions. Readers should expect local variation rather than a single national path.
What this means for U.S. readers — and why Indian readers may still care
For U.S. households, the takeaway is practical: compare both price and bill, and do not assume that the lowest cents-per-kWh figure automatically means the lowest monthly cost. For Indian readers, the broader lesson is methodological. Ownership models, regulation, and customer mix can all shape electricity prices, but those institutional details do not map neatly from the U.S. to India. The comparison is still useful as a way to think about how pricing, service quality, and governance interact, not as a template to copy or reject wholesale.
In other words, the 2025 data supports a careful conclusion: investor-owned utilities were costlier on average for residential customers, public utilities were cheaper on average, and cooperatives had the lowest average price per kWh but the highest average monthly bill. Yet the reason for those differences is mixed, local, and not fully captured by ownership alone.
Sources
- Kadoa investor-owned utilities analysis and downloadable data: https://www.kadoa.com/energy-prices/insights/investor-owned-utilities
- Kadoa methodology and limitations: https://www.kadoa.com/energy-prices/about
- Official EIA-861 annual data page: https://www.eia.gov/electricity/data/eia861/
- Open project repository: https://github.com/kadoa-org/energy-prices
- BLS CPI: https://www.bls.gov/cpi/
