Electricity consumption in the U.S. commercial sector has recovered from pandemic lows, reaching 14 billion kilowatt-hours (kWh) in 2023, a 1% increase over 2019.
However, this growth isn’t evenly distributed, as a few states experiencing rapid expansion of large-scale computing facilities, such as data centers, are driving the demand surge.
Uneven Growth Across States
In the top 10 states with the highest electricity demand growth, consumption increased by a combined 42 billion kWh between 2019 and 2023, a 10% rise.
Conversely, demand in the remaining 40 states decreased by 28 billion kWh during the same period, a 3% decline. This concentrated growth prompted upward revisions in commercial electricity demand forecasts through 2025 in the June Short-Term Energy Outlook (STEO).
Virginia and Texas Lead the Charge
Leading the pack are Virginia and Texas, with additional demand of 14 billion kWh and 13 billion kWh respectively. Virginia’s growth is largely attributed to Dominion Energy Virginia, the state’s primary utility, and its emergence as a major data center hub, connecting 94 new facilities since 2019 due to its robust fiber infrastructure.
Data Centers and Cryptocurrency Mining Fuel Demand
Texas, with its relatively low electricity and land costs, has also attracted a high concentration of data centers and cryptocurrency mining operations.
North Dakota stands out with the fastest relative growth of 37% (2.6 billion kWh increase) between 2019 and 2023, thanks to the establishment of major computing facilities. Western states like Arizona and Utah have also experienced substantial growth in commercial electricity demand.
Decline in Major States
Conversely, electricity demand in large states like New York, Illinois, and California has remained flat or declined compared to 2019 levels.
Monthly forecasts of retail electricity sales by sector for the nine census divisions are provided in the Short-Term Energy Outlook. After analyzing data and projections from utilities and grid operators in regions with rapid data center growth, the forecasts for commercial electricity demand through 2025 were revised upward.
South Atlantic and West South Central Regions See Significant Revisions
The most substantial revisions were made in the South Atlantic and West South Central census divisions, which together account for 40% of U.S. commercial electricity demand.
Commercial consumption in the South Atlantic is now expected to increase by 5% in 2024 and 2% in 2025, while West South Central is projected to grow by 3% this year and 1% next year.
Other regions with strong growth include the West North Central and Mountain census divisions, both with an average annual growth forecast of 3% in 2024 and 2025.
National Outlook and Future Re-evaluation
Nationally, U.S. sales of electricity to the commercial sector are expected to grow by 3% in 2024 and 1% in 2025. However, given the dynamic nature of data center developments, these forecasts will be re-evaluated as more information becomes available.