Alabama's Electricity Bills Are High But You Could Live In Maryland
Gulf Shores News Staff • November 27, 2025
Maryland has the highest average median electric cost of $546 per month
If you have ever wanted to figure out the formula for how you household electric bill is calculated you may want to have a calculator, spreadsheet and AI handy. Most electric providers charge you one rate for your first 1000 kWh, then change the formula for the rest of the month.
According to DOXO, Alabama has the highest average median monthly utility bill in the southeastern U.S. at $378. Higher than Florida, Texas and even Mississippi. But thankfully the rate is much less than the highest in the nation. Maryland takes that honor with a median monthly utility bill of $546.
This year DOXO estimated that Americans will spend more money on utilities than internet, mobile phones and health insurance. In total, Americans will spend approximately $217 Billion on electric in 2025.
Alabama sets electric rates through a formula rate system that allows annual adjustments based on profit projections, bypassing traditional rate cases. The Alabama Public Service Commission (PSC) approves this system, which includes a return on equity (ROE) and costs for capital investments. Factors like fuel costs (Energy Cost Recovery) and the impact of natural disasters also influence rates.
In most states, utilities must go through a traditional, public rate case to change their rates.
In a recent statement to the Alabama Public Service Commission, Alabama Power said it intends to keep electricity rates steady for the next two years, through 2027. The company filed a formal notification on November 21, 2025, outlining a plan that would hold current rates steady if the PSC approves certain cost-management measures, which the Attorney General's office has supported as a way to ease financial pressure on consumers. The PSC is scheduled to consider this proposal at its December 2, 2025 meeting.
In 2024 Alabama Power had projected a 2% rate reduction for 2025.
As the surge for power needs expand with data centers for AI, increased manufacturing, and the growing adoption of electric vehicles power prices have risen in most of the nation.
Energy providers have blamed the need to upgrade the existing infrastructure, extreme weather and the shift to new energy sources.
While Alabamians still have high utility bills, we can look to the west and be thankful we do not have the price surge Californians have experienced with average prices increasing by around 96% between 2014 and 2024, according to the Public Policy Institute of California.
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