Electricity, coal, and renewables

Electricity consumption
We expect U.S. electricity consumption in 2026 will total almost 4,250 billion kilowatthours (BkWh), up 1.3% from 2025. Forecast electricity consumption grows by 3.1% in 2027. The most significant source of electricity demand growth is the commercial sector, which includes data centers, with forecast U.S. sales of electricity to this sector growing by 2.2% in 2026 and 5.3% next year.

Historically, the residential sector has used the most electricity. However, because of recent and forecast growth in the commercial sector, we forecast that commercial sector consumption will be about the same amount as the residential sector in 2026 (about 1,530 BkWh). Forecast growth in U.S. sales of electricity to the residential sector only grow about 0.5% in 2026 and 2027, so commercial electricity demand is likely to surpass residential use for the first time on record in 2027.

U.S. sales of electricity to the industrial sector have also been growing, and we forecast industrial electricity consumption will grow by 1.0% in 2026 and 4.0% in 2027 to reach a total of 1,095 BkWh next year. Increases in electricity demand for both the commercial and industrial sectors is strongest in the West South Central region, driven by data center and manufacturing growth in Texas.

Residential electricity prices
The price of electricity paid by U.S. residential customers averages 18.2 cents per kilowatthour in 2026. This represents a nearly 5% increase from 2025, which is similar to the increase in U.S. prices between 2024 and 2025. We expect residential prices to grow at a slightly lower rate of 2% next year.

Residential prices have been growing in all regions of the United States, and we expect this trend to continue. We expect that regions along the East Coast (Mid-Atlantic, East North Central, and South Atlantic) will experience the largest increases in residential prices, with average annual growth ranging from 5% to 7% between 2024 and 2027. Electric utilities in these regions are citing various factors for rising electricity rates, including higher fuel prices for generation and expenses for bolstering the transmission grid against extreme weather and to accommodate rising power demand.

Coal markets
Although regional coal spot prices have increased over the past year, we expect the average cost of coal delivered to the U.S. electric power sector decreases to $2.36 per million British thermal units (MMBtu) in 2026, down from $2.42/MMBtu at the end of 2025.

The cost of coal delivered to the U.S. electric power sector is largely anchored by mining and transportation costs, particularly in major producing regions but is also sensitive to regional supply-demand conditions and competition from natural gas. Because of the variety of coal grades and plant-specific fuel requirements, coal has a less liquid and less active spot market than natural gas. Supply and demand dynamics tend to affect prices with a lag through term contracting rather than being reflected continuously through more liquid, and volatile, spot markets.

We expect electric power sector coal inventories to increase 12% to reach 123 million short tons (MMst) by the end of 2026, putting downward pressure on prices. The rise in inventories reflects a widening imbalance between supply and domestic demand: we forecast coal consumption to decline by 36 MMst (8%) in 2026, compared with a 10 MMst (2%) decline in production, while exports are expected to increase by 4 MMst (5%).