In-brief analysis
July 31, 2025
In our most recent Short-Term Energy Outlook (STEO), we forecast nationwide U.S. retail electricity sales to ultimate customers will grow at an annual rate of 2.2% in both 2025 and 2026, compared with average growth of 0.8% between 2020 and 2024. The forecast reflects rapid electricity demand growth in Texas and several mid-Atlantic states, where the grid is managed by the Electric Reliability Council of Texas (ERCOT) and the PJM Interconnection, respectively. We expect electricity demand in ERCOT to grow at an average rate of 11% in 2025 and 2026 while the PJM region grows by 4%.
After relatively little change in U.S. electricity demand between 2005 and 2020, retail sales of electricity have begun growing again, driven by rising demand in the commercial and industrial sectors. Developers have proposed numerous data centers and large manufacturing facilities that could consume significant amounts of electricity, and many of these projects are concentrated in the ERCOT and PJM regions. But, the timing of these facilities’ initial operations remains uncertain.
We publish short-term forecasts for electricity sales to ultimate customers for each of the nine census divisions and for the entire United States. We directly incorporate ERCOT’s and PJM‘s monthly projections for power demand into our sales forecasts for the relevant regions. The portion of the power grid that ERCOT operates is located within the West South Central Census Division, which consists of Texas and three neighboring states: Oklahoma, Louisiana, and Arkansas. In Texas, electricity is delivered to end-use customers by four large investor-owned utilities and several municipal utilities.
We expect electricity demand within ERCOT to increase by 7% in 2025 and by 14% in 2026 when some large data centers and cryptocurrency mining facilities come online. We expect retail electricity sales in the broader West South Central Census Division to grow by 5% this year and 9% in 2026.
Dozens of utilities deliver electricity on the PJM Interconnection portion of the grid, which covers 13 states in parts of the Middle Atlantic, South Atlantic, and East North Central Census Divisions. Within the area covered by PJM, the Northern Virginia market contains the highest concentration of data centers in the world, according to analysis conducted for Virginia’s state government. The growing demand for power by these new customers could increase electricity sales in PJM by 3% in 2025 and 4% in 2026.
Principal contributor: Tyler Hodge
