For many U.S. homes, electricity costs more per unit of energy than natural gas, but appliance efficiency and local utility rates determine the bill. Comparing the cost of electricity vs gas is most useful when looking at the same task, such as heating a home or water, rather than comparing a kilowatt-hour with a therm alone.
| Item | Low | Average | High | Notes |
|---|---|---|---|---|
| Electricity rate | $0.11/kWh | $0.16/kWh | $0.30/kWh | Residential energy and delivery charges vary by utility |
| Natural gas rate | $0.80/therm | $1.50/therm | $2.50/therm | Bill rate can include supply and delivery charges |
| Monthly household bill | $90 | $160 | $300 | Electric-only bill; usage and climate matter |
| Monthly gas bill | $30 | $75 | $180 | Higher during cold-weather heating months |
What U.S. households typically pay for electricity and gas
Typical residential electricity rates fall around $0.11-$0.30 per kilowatt-hour (kWh), with a broad national midpoint near $0.16. Natural gas commonly costs about $0.80-$2.50 per therm, with an approximate midpoint of $1.50. These are planning ranges, not guaranteed offers; utility rate plans, location, taxes, and fixed charges can move the total.
A household using 900 kWh monthly at $0.16/kWh would pay about $144 for electricity before any separate fixed fees or taxes. A home using 50 therms at $1.50/therm would pay about $75 for gas on the same basis. Gas often has a lower monthly bill where it serves space heating, but an electric home may avoid a separate gas account charge.
Assumptions: Typical U.S. residential rates, ordinary household use, and no unusual time-of-use surcharges or promotional pricing.
How supply, delivery, and fixed fees shape each utility bill
Utility bills are not just a charge for the energy consumed. Supply covers electricity generation or purchased gas; delivery pays for poles, wires, pipelines, and service; fixed customer charges apply even when usage is low. Taxes and public-benefit fees may appear as separate lines or be folded into rates.
| Bill component | Electricity estimate | Natural gas estimate | What changes it |
|---|---|---|---|
| Energy supply | $0.06-$0.16/kWh | $0.40-$1.60/therm | Market prices and utility plan |
| Delivery charges | $0.04-$0.14/kWh | $0.25-$0.90/therm | Local infrastructure and rate design |
| Monthly fixed fee | $8-$30 | $8-$35 | Utility service territory |
| Taxes and fees | $2-$25/month | $1-$20/month | State, city, and account charges |
Compare the all-in bill rate, including delivery and fixed fees, rather than a supplier’s advertised energy price alone. Some competitive markets show supply separately, while regulated utilities may combine several charges into a per-unit rate.
Which fuel costs less for heating the same home
Comparing useful heat accounts for equipment efficiency. One therm contains about 100,000 Btu. At $1.50 per therm, a 90%-efficient gas furnace delivers roughly 90,000 Btu for $1.50, or about $16.70 per million delivered Btu. At $0.16/kWh, a resistance heater costs about $46.90 per million delivered Btu before accounting for minor equipment losses.
A heat pump changes the comparison because it moves heat instead of generating it directly. At a seasonal efficiency of 2.5-3 units of heat per unit of electricity, the same $0.16/kWh rate works out to roughly $14-$19 per million delivered Btu. Gas may beat resistance heating, while a heat pump can compete with or undercut gas depending on local rates and seasonal performance.
For an appliance comparison, include seasonal efficiency and compare the cost per unit of useful heat, not just the utility rates.
Why kWh, therms, and appliance efficiency change the math
Electricity is billed by kWh and gas by therm, so the raw unit prices cannot be compared directly. A kWh contains about 3,412 Btu, while a therm contains about 29.3 kWh-equivalent of energy. The useful output depends on the appliance: a gas furnace may be 80%-98% efficient, resistance heat is close to 100%, and a heat pump’s seasonal performance commonly varies from about 2 to 4 times electric input.
For water heating, a gas unit may have a lower energy charge but different standby losses and installation costs than an electric tank or heat-pump water heater. Household usage also matters: a home that uses gas only for cooking may pay a fixed monthly fee that erases some savings. Appliance type, efficiency, and the utility’s fixed charge can matter as much as the fuel price.
How climate and state rates shift electricity-versus-gas bills
Electricity prices and gas access vary substantially by region. High-electricity-cost areas can run 20%-80% above the national midpoint, while some low-cost regions fall 10%-30% below it. Gas prices also vary by pipeline access, local distribution charges, and winter demand; colder regions may see higher seasonal consumption even when the per-therm rate is moderate.
Climate affects total spending as well as rates. A well-insulated home in a mild climate may use little heating fuel, while a larger home in a cold region can consume several times as much. Rural homes without a gas line may also face propane or electric options instead of utility gas. Local utility tariffs and annual usage are more reliable comparison points than national averages.
What a heating-season comparison looks like at three usage levels
These examples use $0.16/kWh electricity, $1.50/therm gas, a 90%-efficient gas furnace, and resistance heating at near-100% efficiency. They illustrate energy charges only, excluding fixed fees and taxes.
| Delivered heat per season | Gas furnace cost | Resistance heat cost | Approximate difference |
|---|---|---|---|
| 20 million Btu | $334 | $938 | Resistance costs about $604 more |
| 50 million Btu | $834 | $2,345 | Resistance costs about $1,511 more |
| 80 million Btu | $1,334 | $3,752 | Resistance costs about $2,418 more |
A heat pump with a seasonal performance factor of 3 would use about one-third as much electricity as resistance heat for comparable output. At the example electric rate, its energy charges would be roughly $313, $782, and $1,251 across those usage levels. Actual results depend on weather, equipment sizing, backup heat, and installation quality.
When heat-pump installation costs change the fuel comparison
Utility bills are only one part of the decision when replacing equipment. A basic central heat-pump installation may run about $6,000-$12,000, while complex ductwork, electrical upgrades, or cold-climate equipment can push projects to $15,000-$25,000 or more. Replacing an existing furnace with a gas furnace commonly costs about $4,000-$10,000, depending on capacity and venting.
Installation quotes should specify equipment capacity, efficiency, duct repairs, electrical work, permits, and removal of old equipment. A high-efficiency system may reduce usage, but its added purchase price needs to be weighed against expected annual savings and available incentives. Compare installed prices and projected operating costs over several years, not equipment prices in isolation.
Ways to lower the bill without changing every appliance
Start by reviewing 12 months of bills and identifying the all-in rate, fixed charges, and seasonal consumption. Sealing air leaks, improving insulation, and correcting thermostat schedules can reduce heating demand regardless of fuel. Where a supplier choice exists, compare contract length, variable-rate terms, delivery charges, and early termination fees.
Before replacing equipment, get multiple itemized quotes and ask whether repair, duct sealing, or a partial upgrade can extend existing equipment life. Avoid paying for capacity or premium features unsupported by a load calculation. Reducing the home’s energy demand can save money without committing to a new fuel or a major installation.