Data Center Electricity Cost by State in 2026

The same 100 MW data center can face an electricity-cost difference of hundreds of millions of dollars per year depending on where it operates.

The latest state-level data available as of September 4, 2026 comes from the U.S. Energy Information Administration and covers January through June 2026.

Across the United States, the year-to-date average industrial electricity price is 8.89 cents per kWh.

But the state range is enormous: from 5.41 cents/kWh in New Mexico to 37.26 cents/kWh in Hawaii.

2026 industrial electricity prices by state

The table below uses EIA Table 5.6.B: average electricity price to industrial ultimate customers, year-to-date through June 2026.

I prefer the year-to-date figure to a single monthly observation because it reduces some of the noise from seasonal and monthly price movement.

Source: U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.B. Data through June 2026, released August 26, 2026. Values are preliminary.

The cheapest industrial states are concentrated below 7 cents per kWh

Tennessee sits close behind at 6.77 cents/kWh, Iowa at 6.94 cents and Washington at 7.09 cents.

These figures help explain why power-intensive industries often find states in the South, Mountain West and parts of the Midwest economically attractive.

But a low statewide industrial average does not prove that 100 MW is available at a particular site.

The most expensive states show how large the geographic spread really is

Connecticut is also high at 18.71 cents/kWh and New Hampshire at 18.22 cents.

For a continuously operating data center, those differences compound every hour of every year.

A 100 MW data center makes a one-cent difference enormous

Assume a data center has:

• 100 MW of IT load;
• PUE of 1.20;
• continuous 8,760-hour operation.

Facility demand is therefore 120 MW.

Annual facility electricity consumption is approximately 1.0512 billion kWh.

At that scale, every 1 cent/kWh difference is worth approximately $10.5 million per year.

These annual figures are simple arithmetic using the EIA statewide industrial averages. They are not estimates of what a specific hyperscale project would pay.

EIA industrial prices are a benchmark, not a data center tariff

This limitation is important enough to state explicitly.

EIA reports average revenue per kWh across customers classified in each end-use sector.

A large data center may operate under a dedicated large-load tariff, negotiated service arrangement or electricity-procurement structure that produces a materially different effective price.

EIA itself notes that utilities and energy service providers may classify commercial and industrial customers based on NAICS codes, demand or usage thresholds in their rate schedules.

Demand charges can matter even when the energy rate looks cheap

A data center electricity bill is not always simply: kWh multiplied by cents per kWh.

Utility structures can include demand charges, transmission charges, riders, minimum billing commitments, capacity-related charges and other components.

Large-load tariffs are also evolving as utilities try to protect other customers from the cost of infrastructure built specifically for data centers.

That is why the state-level table is best used for market screening, not final underwriting.

Low electricity price does not compensate for unavailable power

A 6-cent market can still be a poor data center location if the utility cannot deliver the requested MW for four years.

Conversely, a more expensive power market can make economic sense when grid capacity is available immediately and the facility can begin generating revenue much sooner.

That is why electricity cost should be read alongside utility interconnection cost and timing , rather than in isolation.

PUE can erase part of a cheap-state advantage

Location affects more than the price of electricity.

Climate, cooling architecture and facility design influence how much electricity must be purchased for every unit consumed by IT.

A facility buying cheap electricity but operating at PUE 1.50 may not outperform a more efficient facility paying a somewhat higher rate.

For the same 100 MW continuous IT load, Site A would spend roughly $92.0 million per year at those assumptions while Site B would spend about $84.1 million.

The cheaper tariff would lose because the facility consumes substantially more total energy.

How I would use the state table for site selection

1. Use the EIA industrial average as the first statewide screening benchmark.
2. Identify the serving utility at the actual candidate site.
3. Obtain the applicable large-load tariff rather than assuming the EIA average will apply.
4. Model demand, transmission and minimum-billing charges.
5. Confirm available MW and expected energization date.
6. Apply the facility's expected PUE to convert IT demand into utility demand.
7. Test future power-price scenarios rather than underwriting only the current rate.

What is the best state for cheap data center electricity in 2026?

On EIA's year-to-date industrial price data alone, New Mexico is currently the cheapest state at 5.41 cents/kWh.

Oklahoma, Arkansas, Texas, Montana, Tennessee and Iowa also sit below 7 cents/kWh.

But I would not call any of them the “best data center state” from this table alone.

Electricity price is only valuable if the site can secure enough power, at the required reliability level, on a commercially useful timeline.

Sources and research notes

• U.S. Energy Information Administration — Electric Power Monthly, Table 5.6.B . Average electricity price to ultimate customers by end-use sector and state, year-to-date through June 2026.
• Data release date: August 26, 2026. EIA identifies the figures as preliminary estimates based on its cutoff-model sample.
• EIA Form EIA-861M, Monthly Electric Power Industry Report.

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