Electricity Rates in Tennessee (2026)
National average: 16.72¢/kWh · Source: EIA, January 2026
TVA Makes Tennessee One of the Cheapest States for Electricity
The Tennessee Valley Authority (TVA) supplies virtually all of the state's electricity through a network of local power companies and cooperatives. TVA's mix of nuclear, hydroelectric, natural gas, and coal generates power at below-national-average costs. At 12.87 cents/kWh, Tennessee's rates are among the lowest in the Southeast. The TVA model (federal utility selling wholesale to local distributors) keeps costs low because there is no profit motive at the generation level.
Local Power Companies Add Their Own Markup
While TVA sets the wholesale rate, each of Tennessee's 150+ local power companies adds its own distribution charges and fees. This creates variation across the state. Nashville Electric Service, Memphis Light Gas and Water, and Knoxville Utilities Board each have slightly different total rates. Your actual per-kWh cost may be 1-3 cents higher or lower than the state average depending on which local utility serves you.
Calculate Any Appliance Cost in Tennessee
Most Expensive Appliances to Run in Tennessee
Monthly costs at 12.87¢/kWh using typical wattage and hours:
| Appliance | Watts | Hrs/Day | Monthly Cost |
|---|---|---|---|
| Tankless Water Heater | 27000W | 1h | $104.25 |
| Electric Furnace | 10000W | 8h | $308.88 |
| Electric Car Charger (Level 2) | 7200W | 4h | $111.2 |
| Hot Tub | 6000W | 4h | $92.66 |
| Clothes Dryer | 5000W | 1h | $19.31 |
| Electric Water Heater | 4500W | 3h | $52.12 |
| Garage Workshop Heater | 4000W | 4h | $61.78 |
| Central Air Conditioner | 3500W | 8h | $108.11 |
| Electric Oven | 2500W | 1h | $9.65 |
| Dishwasher | 1800W | 1h | $6.95 |
| Hair Dryer | 1800W | 0.15h | $1.04 |
| Electric Pressure Washer | 1800W | 0.5h | $3.47 |
| Space Heater | 1500W | 8h | $46.33 |
| Electric Baseboard Heater | 1500W | 8h | $46.33 |
| Infrared Heater | 1500W | 6h | $34.75 |
Tips for Reducing Your Electricity Bill in Tennessee
- TVA's EnergyRight program offers rebates and low-interest loans for home energy improvements including insulation, heat pumps, HVAC tune-ups, and smart thermostats. Check with your local power company.
- Tennessee's four-season climate means you use both heating and cooling. A heat pump handles both efficiently and is ideal for Tennessee's moderate winters.
- Many TVA local power companies offer demand response programs that give bill credits in exchange for allowing brief AC reductions during peak summer hours.
- Nashville and Memphis summers are hot and humid. Ceiling fans plus AC at 78F beats AC at 72F by 30% in energy costs.
Frequently Asked Questions About Tennessee Electricity
TVA provides wholesale electricity to all of Tennessee at below-market costs. TVA's diverse generation fleet (nuclear, hydro, gas, coal) was largely built decades ago with federal support, resulting in low debt costs. The lack of a profit motive at the generation level keeps wholesale rates low. Local distribution costs add to the bill but are generally modest.
The average Tennessee household pays about $120-$150 per month. Summer and winter peaks can push bills to $180-$220 due to AC and heating, respectively. Tennessee's four-season climate means electricity is a year-round expense, but the low rate keeps total annual costs below the national average.
Compare Neighboring Rates
See how Tennessee compares to other states in the Southeast region:
Alabama
14.82¢/kWh
Florida
15.63¢/kWh
Georgia
14.12¢/kWh
Kentucky
12.87¢/kWh
Mississippi
13.76¢/kWh
North Carolina
13.98¢/kWh
South Carolina
14.98¢/kWh
Virginia
15.34¢/kWh
West Virginia
13.12¢/kWh
Electricity rate data sourced from the U.S. Energy Information Administration (EIA), average residential retail price, last updated January 2026. Your actual rate depends on your utility, plan, and usage tier. See our full disclaimer.