Electrical transmission line (Jeff Beach, North Dakota Monitor)
BISMARCK, N.D. (North Dakota Monitor) – North Dakota consumers pay less for electricity than any other state in the country, according to a new report.
The report by the American Legislative Exchange Council found North Dakotans paid an average of 7.93 cents per kilowatt hour for electricity in 2024, the most recent year of complete data. That’s 42% below the national average cost, the report said.
That affordability continued in 2025 and through January of this year, according to the U.S. Energy Information Administration. Monthly data on power prices show that while electricity cost slightly more last year compared to 2024, it was still cheaper in North Dakota than anywhere else in the country.
MDU Resources, one of the utilities that provide electricity in North Dakota, attributed the low rates to North Dakota’s commitment to “reliability, fuel diversity and sound energy policy.”
“This ranking underscores the value of a balanced, reliable energy mix and forward‑looking policies that keep electricity affordable for families, businesses and communities,” said Garret Senger, chief utilities officer for MDU Utilities Group, in a statement.
Stephanie Hoff, director of communications for Otter Tail Power, said the low cost of electricity in North Dakota stems from utilities’ commitment to providing “low cost, reliable service” to communities in the state.
“It really, truly is how we operate as electric utilities in the state of North Dakota, and it is the expectation of our regulators,” Hoff said.
The most recent EIA data from January shows the cost of power in North Dakota rose by 9% compared to January 2025, from 7.8 cents to 8.47 cents per kilowatt hour. That was still cheaper than anywhere else in the United States. New Mexico consumers paid the second lowest price for electricity that month.
The cost for residential consumers in North Dakota was slightly higher, 10.92 cents per kilowatt hour, in January. That was 7% lower than Nebraska, the next most affordable.
For context, January electricity prices for residential homes in North Dakota were 65% lower than those in Massachusetts in January, the most expensive in the continental U.S. that month, according to the EIA.
“The utilities in North Dakota truly recognize that the success of our communities is dependent on the success of our businesses and our residents,” Hoff said. “So we as investor-owned utilities take our responsibility to serve with low cost rates very seriously.”
Any rate increase by an investor-owned utility like Otter Tail or MDU has to be approved by the Public Service Commission. Commissioner Sheri Haugen-Hoffart said regulators expect utilities to demonstrate a true need to raise rates before the agency will consider approving any proposed increase.
“When we do receive an application on an electrical rate, it is scrutinized very well by the staff,” said Haugen-Hoffart, one of three members of the commission. “It’s a very lengthy process that we internally go through on evaluating an electrical rate increase.”
Coal is the dominant energy source for power generation in North Dakota, producing 54% of the state’s electricity in 2024, according to the American Legislative Exchange Council’s report. Wind produced 35%, natural gas 6% and hydroelectric 5%. That power generation mix has remained consistent, according to January data.
There are growing concerns in North Dakota and elsewhere that large power users, like data centers, could drive up the cost of electricity for residential consumers. MDU and Otter Tail representatives said they hope the new industries will actually benefit existing power customers over time.
Otter Tail’s Hoff said the utility’s customers are not going to have to pay more for electricity to compensate for new infrastructure needed by a single large customer, like a data center.
“What we hope happens is that over the long term, our customers will benefit from having these businesses locate in the state of North Dakota,” Hoff said. “The more customers you have on the grid, the more you can spread costs.”
Every investor-owned utility in the state has committed to requiring data center developers to pay the cost of any infrastructure a project needs, Haugen-Hoffart said. But that doesn’t necessarily apply to other industrial development, nor does it erase the rising costs associated with upgrades that are needed regardless of new demands on the grid.
The cost of infrastructure upgrades continues to face inflationary pressure, the commissioner said. The cost of a transformer is 70% to 100% higher than it was five years ago, copper and aluminum wiring is as much as 50% higher than it used to be, and parts of the state’s electrical grid are 50 to 70 years old and need to be upgraded in order to maintain reliability.
“We have to be very clear on what is causing the rates to go up,” Haugen-Hoffart said. “I can’t stress it enough, at the PSC, that reliability and affordability. It’s our goal, it’s our mission. And as everyone else, we as commissioners are rate payers too.”
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