Average Electric Bill in Michigan

We dug into the U.S. Energy Information Administration’s data[1] to look at the average monthly electric bill for Michigan residential households. These averages are for the full year of 2018, not any specific month of 2019, given that electricity usage & prices fluctuate month-to-month.

$103.59
average monthly residential electric bill in Michigan
*This is 12% less than the United States national average, which is $117.65.
15.45¢/kWh
average residential electric rate for households in Michigan
*This is 20% greater than the U.S. average, which is 12.87¢/kWh.
671 kWh
average monthly residential electricity consumption in Michigan
*This is 26.6% less than the national average (914 kWh) & the 11th lowest in the U.S..
15th
Michigan ranking for lowest electric bill in the United States
*Relative to average monthly household income (2.36%), MI has the 25th highest bill.

Why Are Electric Bills in Michigan Comparatively Low?

The two factors that make up the cost an electric bill are (1) cost and (2) consumption. Looking at each, cost is significantly higher in Michigan when compared to the national average (20% greater). However, the average electricity consumption of residents in the state is 26.6% less than the national average, helping to ease the increased cost of electricity.

Reasons for High Electricity Rates in Michigan

Since the electricity rates in Michigan are significantly higher than the national average (20% higher) , it’s important to understand what makes electricity more or less expensive. The factors affecting this number are:

  1. Supplyan increase in the supply of energy brings costs down. For example, weather events such as high amounts of rain or high wind speeds can temporarily increase the supply of energy where there are hydropower plants or wind turbines to take advantage, and as a result, lower electricity rates.
  2. Demand – an increase in the demand for energy causes costs to rise. This is because the use of more costly fuels, such as natural gas, help “fill in” for the rise in demand. For example, a heat wave might temporarily increase the demand for cooling and the subsequent need for fuels, and as a result, raise electricity rates.

Additional factors that impact electricity rates include state & federal regulations, global markets and even financial speculation.

Reasons for Low Electricity Consumption in Michigan

Given that electricity consumption in Michigan is significantly lower than the national average (26.6% lower), it’s important to understand exactly what electricity is used for. The EIA looked at the end uses of electricity in the average American household and found the following breakdown:

NOTE

“Other uses” includes small electric devices, heating elements, exterior lights, outdoor grills, pool and spa heaters, backup electricity generators, and motors not listed above. Does not include electric vehicle charging.

Tips for Lowering Electric Bill

  • Reduce space heating/cooling– given that heating & cooling make up a large part of the average electric bill, increasing energy efficiency in this area can have arguably the biggest impact on your bill. Here are some things you can do to reduce your usage in this area:
    • Use a programmable thermostat (can reduce heating/cooling by ~10%)
    • Use extra insulation
    • Dress up/down to the temperature
    • Replace your air filter more often
    • Check seals on windows/doors/appliances for openings/leaks
  • Reduce water heating – one of the next biggest portions of the average electric bill is from water heating, which can be reduced by showering at lower temperatures, taking shorter hot showers and by lowering the temperature on the water heater itself (ideally to 120 degrees Fahrenheit). 
  • Adjust fridge & freezer temperatures – ideally, your fridge should be at 38 degrees and your freezer at 5 degrees Fahrenheit.

Where Does Michigan Get Its Electricity From?

The state of Michigan stores more than one-ninth of the nation’s natural gas, but when it comes to electricity generation, coal is the state’s king. According to the EIA, coal was responsible for 37% of Michigan’s electricity generation. That sounds like a lot, but keep in mind that it was 53% only five years ago.

However, natural gas and nuclear power provided 36% of electricity combined, so Michigan is striving for cleaner electricity. Other sources include biomass, ethanol and fuel oil.

[1] Data from: https://www.eia.gov/electricity/data.php#sales 

Read About Electric Bills in Other States