Electricity, coal, and renewables

Electricity consumption
The commercial and industrial sectors are driving growth in U.S. electricity consumption. In our forecast, U.S. electricity sales to retail customers increase 2.2% in 2025 and 2.4% in 2026, following a 2.3% increase in 2024. Data centers, increased electrification, and growth in manufacturing activity continue to spur growth in electricity demand, especially in the supply regions managed by the Electric Reliability Council of Texas (ERCOT) and the PJM regional transmission organizations.

We forecast electricity sales in the commercial sector, which includes computing demand, will exceed those in the residential sector in 2026, a first since we started collecting the data. We forecast that electricity sales to the commercial sector will rise 3.0% in 2025 and a further 4.5% in 2026, bringing total sales of electricity in the commercial sector to 1,540 billion kilowatt hours (BkWh) in 2026.

Electricity sales to industrial consumers are forecast to rise by 2.0% in 2025 and 3.5% in 2026. Residential electricity sales are forecast to rise more slowly at 1.7% overall in 2025, primarily as a result of cold weather at the beginning of the year. We forecast a slight decline of 0.4% in electricity sales to the residential sector in 2026 as fewer heating degree days are expected in the early winter months of 2026 compared with the same period in 2025.

Although the pace and extent of the expected growth in demand remains uncertain, we currently forecast that approximately 34% of the forecast increase in U.S. commercial electricity demand and 69% of the forecast increase in industrial electricity demand will come from the West South Central Census Division (Arkansas, Louisiana, Oklahoma, and Texas) in 2025. This region accounts for 67% of the increase in combined commercial and industrial electricity demand in the United States in 2026.

Retail electricity prices
We expect retail electricity prices to residential customers will average 17 cents per kilowatthour (kWh) nationwide in 2025, a 4% increase over 2024, and then rise to approximately 18 cents/kWh in 2026. This rise continues a trend in which residential electricity prices have increased at an average annual rate of 5% each year since the COVID-19 pandemic. The increase in retail electricity prices this year comes as the cost of natural gas to the electric power sector was up more than 40% in 1H25 compared with a year earlier, with similar year-over-year increases forecast for the remainder of 2025. The average cost of natural gas for power generation in our forecast increases another 17% in 2026.

Coal production
U.S. coal production in our forecast totals 520 million short tons (MMst) in 2025, 2% higher than last year. Most of the increase in production was observed in 1H25, with a total production of 267 MMst. The increase in 1H25 over a year earlier was driven in part by a 6% increase in the Appalachia region, because of recovery from lower production levels following the collapse of the Francis Scott Key Bridge last year, and because of rising natural gas prices that have raised demand for coal-fired power generation.

We forecast production for 2H25 to be 255 MMst. This modest drop off in production across all regions in 2H25 reflects coal-fired power plants working down coal stockpiles. We forecast that production will fall to 490 MMst in 2026 as more coal plants retire and remaining coal plants hold large coal stockpiles, as measured by days of burn.

Coal exports
Coal exports in our forecast total 97 MMst in 2025, a 10% decline from last year. This decline reflects a global market characterized by persistent oversupply and lower coal prices in both the steam and metallurgical coal markets. Steam coal producers have turned to selling to the domestic market where coal prices have steadily climbed since last summer. As a result, we forecast that steam coal exports fall by 7% to 47 MMst in 2025 and by 5% to 45 MMst 2026.

We forecast that metallurgical coal exports will fall to 50 MMst in 2025, a 13% decline from 2024. Metallurgical coal producers continue to face a weak global pricing environment that has led to low margins on exports and production cuts. In addition, tariffs imposed on U.S. imports by China have virtually eliminated U.S. coal exports to that country. Although the outlook for metallurgical coal remains uncertain due to many factors, we expect U.S. metallurgical coal exports to remain flat in 2026 as the global market gradually recovers from a weak pricing environment.