This study is aimed at examining the elasticity of electricity demand and its determinants of householdâ€™s electricity demand in Addis Ababa City. Besides, this study is following the electricity tariff change implemented, in an attempt to optimize electricity consumption in the country, in 2019. The effects of any price revisions on consumption will depend on the price elasticity of demand for electricity. Primary data was collected for this purpose from over four hundred households of Addis Ababa City and constant electricity model was used through OLS estimates. The electricity demand functions have been estimated using monthly consumption and expenditures of households. The study indicated that electricity demand is income, price, and also the substitute fuel price (charcoal) inelastic. Electricity is a necessity and a basic need of households in the Addis Ababa. Age, sex, own price, substitute price, income/expenditure, family size, number of rooms, householdâ€™s house type and meter type are important in determining electricity demand. The study concluded that any planning associated with electricity tariff reform should consider the price elasticity of electricity demand. Moreover, the study suggested that pricing policy, at least in the long-run, can be an effective instrument for achieving electricity conservation and to manipulate consumption of traditional energy sources and energy policy planners should exploit the benefits of estimated price elasticity and income elasticities to make well informed decisions. Further the study contributes in the area of empirical electricity demand analysis.