Dive Brief:
- Overall U.S. wholesale electricity prices are expected to continue rising next year, the Energy Information Administration said in its latest short-term energy outlook, published Wednesday.
- The agency forecast the load-weighted average of the 11 regional wholesale prices it tracks to be $47/MWh in 2025 — 23% higher than the 2024 average — and to reach $51/MWh in 2026, another 8.5% increase.
- Driving the rise in wholesale prices next year is primarily a projected 45% increase at the Electric Reliability Council of Texas-North pricing hub. “Natural gas prices tend to be the biggest determinant of power prices,” the EIA said. “But in 2026, the increase in power prices in ERCOT tends to reflect large hourly spikes in the summer months due to high demand combined with relatively low supply in this region.”
Dive Insight:
As prices go up, demand is also rising, EIA said, with much of it concentrated in the West South Central region that includes Texas, Oklahoma, Louisiana and Arkansas, as a result of “data centers and cryptocurrency mining facilities,” it said.
Electricity sales are set to increase across the U.S. by 2.4% in 2025 and 2.6% in 2026. But in the West South Central region, sales will grow 4.4% in 2025 and 9.2% in 2026, due in large part to commercial customers.
The increases in Texas and nearby states “contribute 34% of the growth in U.S. electricity sales in 2025 and 66% of the growth in U.S. electricity sales in 2026,” the report said.
Some price increases can be attributed to fuel costs. Natural gas prices are forecast to rise to an average of almost $3.90/MMBtu this winter and an average of $4/MMBtu in 2026, “primarily due to increased liquefied natural gas (LNG) exports amid flat production growth.”
The EIA forecasts U.S. energy-related carbon dioxide emissions to increase by 1.8% in 2025, followed by a decrease of 0.7% in 2026.
“The largest changes in emissions for both years are attributable to shifting coal consumption for power generation,” it said.
