We expect rapid electricity demand growth in Texas and the mid-Atlantic

AI generated summary

The latest Short-Term Energy Outlook (STEO) forecasts a significant increase in U.S. retail electricity sales, projecting an annual growth rate of 2.2% for 2025 and 2026, compared to a mere 0.8% from 2020 to 2024. This growth is primarily driven by surging electricity demand in Texas and several mid-Atlantic states, particularly within the Electric Reliability Council of Texas (ERCOT) and the PJM Interconnection. Specifically, ERCOT is expected to see an average demand growth of 11% in the next two years, while the PJM region anticipates a 4% increase.

The resurgence in electricity demand follows a period of stagnation from 2005 to 2020, with new commercial and industrial projects, including data centers and manufacturing facilities, contributing to this trend. While the exact timing of these projects' operations remains uncertain, the demand is expected to significantly impact electricity sales, particularly in ERCOT, where a 7% increase is anticipated in 2025 and a 14% rise in 2026. In the PJM region, the demand from data centers, especially in Northern Virginia, is projected to boost electricity sales by 3% in 2025 and 4% in 2026.