Electricity costs continue to vary widely across the U.S., making plan choice an important financial decision for households of all sizes. To better understand how prepaid and traditional postpaid electricity plans compare, Prepaid Electricity conducted a nationwide cost simulation and a survey of over 1,000 Americans who pay their own power bills.
Let’s explore how pricing structures, predictability, and consumer experience vary by where people live and how they pay for electricity.
Key Takeaways
- In some of the most expensive electricity markets in the U.S., including Hawaii, California, and Massachusetts, prepaid electricity plans could save households over $100 per month.
- Americans on prepaid electricity are more likely to feel in control of their finances than those on traditional plans (90% vs. 38%).
- Americans on prepaid electricity are more satisfied with their plan than those on traditional plans (69% vs. 40%).
- Traditional plan users are more likely than prepaid users to spend over $200 on electricity in a month (27% vs. 5%).
- Traditional plan users are more likely than prepaid users to experience higher-than-expected bills every month (22% vs. 6%).
The Real Cost of Power: Prepaid vs. Traditional
To compare prepaid and traditional electricity costs on an even playing field, we modeled monthly bills using standardized assumptions across all 50 states. The simulation applied state-reported average electricity usage and rates, then calculated what different household types would pay under each plan structure. Household electricity use was grouped into three common categories:
- Single-person household: Used about two-thirds of the state’s average monthly electricity consumption
- Average household: Used the full state-reported average monthly electricity consumption
- Family household: Used roughly one and a half times the state’s average monthly electricity consumption
By holding electricity usage constant and changing only the pricing model, the chart below shows how plan type alone can influence monthly costs depending on where a household lives.
- In some of the most expensive electricity markets in the U.S., including Hawaii, California, and Massachusetts, prepaid electricity plans could save households over $100 per month.
Top 10 States With the Most Potential Monthly Savings From a Prepaid Electricity Plan (for an average household):
- Hawaii: $105.00
- California: $76.00
- Massachusetts: $75.50
- Rhode Island: $73.80
- Connecticut: $69.90
- Maine: $61.60
- New Hampshire: $57.90
- New York: $50.40
- Alaska: $48.30
- Maryland: $48.20
What Americans Say About Their Electricity Plans
- Americans on prepaid electricity are more likely to feel in control of their finances than those on traditional plans (90% vs. 38%).
- Americans on prepaid electricity are more satisfied with their plan than those on traditional plans (69% vs. 40%).
- What Americans see as advantages of prepaid electricity:
- Avoiding large end-of-month bills (50%)
- Helps me manage my budget (48%)
- Having control over what I spend (42%)
- Knowing my usage in real-time (39%)
- Helps me use less electricity (31%)
- No deposit required to start service (24%)
- 81% of Americans who use prepaid electricity say it helps them stay on budget.
Surprise Bills and Monthly Spending
- Traditional plan users are more likely than prepaid users to experience higher-than-expected bills every month (22% vs. 6%).
- Traditional plan users are more likely than prepaid users to spend over $200 on electricity in a month (27% vs. 5%).
- 72% of Americans have changed their energy use habits to save money in the past year, with prepaid users (79%) being more likely than traditional plan users (71%) to say so.
- 87% of Americans would switch electricity plan types if it meant better savings or predictability, with prepaid users (94%) being more likely than traditional plan users (86%) to agree.
- 24% of Americans said they fully understand how their electricity plan works, with prepaid users (42%) being more likely than traditional plan users (22%) to say so.
Prepaid vs. Traditional Electricity Plans
Your electricity plan type can make a real difference in how much you pay and how confident you feel about your monthly bills. In higher-cost states, especially, prepaid electricity can offer meaningful savings while helping people stay on budget and avoid surprises.
If you’re deciding between prepaid and traditional electric plans, the takeaway is simple: choose the option that gives you clearer visibility and control over your spending. Knowing how your plan works and how your usage affects your balance can make managing electricity costs feel a lot more manageable.
Methodology
We simulated monthly electricity costs across all 50 U.S. states using state-level residential electricity usage and rate data. Household electricity usage was segmented into three common household types:
- Single-person household: 68% of the state’s average usage (kWh)
- Average household (couple): Based on the published state average usage (kWh)
- Family of four: 160% of the state’s average usage (kWh)
Monthly average usage and traditional electricity rates were taken from the U.S. Energy Information Administration (EIA).
For prepaid electricity plans, we used a standardized model reflecting market averages:
- Prepaid rate: 15.5¢ per kWh
- Prepaid monthly service fee: $15 flat
Prepaid electricity pricing assumptions are based on publicly available offerings from providers such as Payless Power, which currently list prepaid plans in the range of 18.0¢–19.2¢/kWh (as of January 2026) in Texas. To provide a market-average benchmark across all states, we used a simplified model of 15.5¢/kWh + $15/month.
Monthly prepaid costs were calculated as: (Monthly Usage × 15.5¢ ÷ 100) + $15 fee
Traditional postpaid costs were calculated as: (Monthly Usage × State traditional postpaid Rate ÷ 100)
For each household type in each state, we calculated the monthly cost for both prepaid and traditional plans. We then identified the cheapest plan option and computed the monthly savings by taking the absolute difference between the two plans. This simulation assumes prepaid electricity plans are available in all states, although actual plan availability and regulatory status may vary.
We also surveyed 1,104 Americans who personally pay their household’s electricity bill. Respondents were either homeowners or renters. Among them, 10% reported using a prepaid electricity plan, while 90% reported using a traditional postpaid plan. Data was collected in January 2026.
About Prepaid Electricity
Prepaid Electricity makes it easy to get power on your terms. With no credit checks, no deposits, and same-day connections, you’re in control from the start. We work with trusted providers to give you simple, affordable prepaid electricity plans plus daily balance alerts so there are never any surprises. Getting started is fast, easy, and stress-free.
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