ST. PAUL, Minn. (AP) — Electricity prices in Minnesota continued their steady climb in 2025, with consumers paying more for power than they did a year ago, although rates remain below the national average.
Minnesota’s average retail electricity price reached 12.67 cents per kilowatt-hour in 2025, up 2.6% from 12.35 cents per kilowatt-hour in 2024. Since 2016, average electricity prices for residential, commercial and industrial customers have increased 27% in nominal terms.
State officials attribute the higher prices to several factors, including continued investments by utilities to modernize electric infrastructure and higher costs for equipment and materials associated with expanded federal import tariffs.
Even with the increase, Minnesota consumers continue to pay less than the national average. Across the United States, average retail electricity prices rose to 13.63 cents per kilowatt-hour in 2025, a 5.3% increase from the previous year.
After adjusting for inflation, Minnesota’s average electricity rates declined 0.4% between 2024 and 2025, while inflation-adjusted electricity prices nationwide increased 2.3% over the same period.
Electricity also remains relatively affordable for Minnesota households. The state’s average electricity burden — the share of gross household income spent on electricity — held steady at 0.81% over the past five years. Nationally, the average household spends about 1.0% of its income on electricity.
Although electricity costs have increased over the past decade, Minnesota continues to maintain lower-than-average rates and a smaller household energy burden than much of the country, even as utilities continue investing in grid improvements and adapting to rising operating costs.