Published December 15, 2025
By NZero
U.S. electricity consumption in the United States is entering a new phase. According to the U.S. Energy Information Administration, total power demand is projected to reach record levels in both 2025 and 2026. This growth comes after years of relatively flat electricity consumption and reflects deeper structural changes across the economy. Expanding data center capacity, the rapid rise of artificial intelligence workloads, and mounting physical constraints on the power grid are converging to push electricity demand higher. The latest forecasts suggest that this trend is not temporary, but rather a defining feature of the U.S. power system in the second half of the decade.
The December 2025 Short-Term Energy Outlook from the U.S. Energy Information Administration shows total U.S. electricity consumption rising from about 4,110 billion kilowatt-hours in 2024 to more than 4,260 billion kilowatt-hours in 2026. Quarterly data highlight increasingly pronounced summer peaks, with third-quarter consumption exceeding 1,200 billion kilowatt-hours by 2026. Commercial electricity use remains the largest contributor to growth, followed by steady increases in industrial demand. Residential consumption is comparatively stable, reflecting efficiency gains that partially offset population growth and electrification. These projections mark a clear break from the slow demand growth that characterized much of the 2010s.
A significant share of incremental demand is coming from data centers, particularly those designed to support artificial intelligence and high-performance computing. AI workloads require dense computing power and continuous operation, resulting in high and constant electricity consumption. Large-scale data centers can draw as much electricity as small cities, and their clustering in specific regions intensifies local grid impacts. States with established digital infrastructure, reliable transmission access, and relatively low power prices are seeing the fastest growth in new data center interconnections. For utilities, forecasting this demand is increasingly complex because project timelines are shorter and load additions are larger than in traditional commercial development.
While demand is rising, the physical and regulatory capacity of the grid is struggling to keep pace. Transmission expansion has lagged behind load growth, and interconnection queues for new generation and storage projects continue to lengthen. Aging infrastructure in some regions further limits flexibility during peak demand periods. These constraints increase the risk of congestion, higher wholesale prices, and reliability challenges during extreme weather events. They also complicate efforts to integrate additional renewable generation, which is often located far from major load centers. As a result, demand growth has a more pronounced impact on system stress than it would in a more flexible grid environment.
Rising electricity demand has broad implications for energy markets and emissions trajectories. Higher and more volatile power prices are likely in regions where supply and transmission additions lag behind demand. Natural gas generation continues to play a central role in meeting incremental load, particularly during peak periods, even as renewable capacity expands. From a climate perspective, growing electricity use increases the urgency of reducing the carbon intensity of the power sector. For corporate energy buyers, the trend underscores the importance of long-term power procurement strategies, energy efficiency investments, and load management as electricity becomes an increasingly critical input across the economy.
The EIA’s latest forecasts confirm that record-breaking electricity demand is becoming a defining feature of the U.S. power system. Data centers, artificial intelligence, and grid constraints are interacting forces that are reshaping how electricity is produced, delivered, and consumed. The challenge for policymakers, utilities, and market participants is to ensure that rising demand is met with reliable supply and resilient infrastructure while maintaining progress toward emissions reduction goals. How effectively the grid adapts over the next few years will shape energy costs, system reliability, and climate outcomes well beyond the current forecast horizon.
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