In a significant shift for small business owners operating in energy-intensive sectors, the U.S. Energy Information Administration (EIA) has projected a notable uptick in electricity sales by 2026. According to the latest Short-Term Energy Outlook released on July 31, 2025, retail electricity sales are expected to grow at an annual rate of 2.2% in both 2025 and 2026. This growth marks a departure from the more stagnant average growth of just 0.8% from 2020 to 2024.
The surge in demand is chiefly driven by increased activity in commercial and industrial sectors, notably in Texas and several mid-Atlantic states. The Electric Reliability Council of Texas (ERCOT) and the PJM Interconnection, overseeing key areas in these regions, are at the forefront of this trend. In ERCOT, electricity demand is projected to skyrocket at an average rate of 11% in 2025 and 14% in 2026, propelled by the emergence of large data centers and cryptocurrency mining facilities. Meanwhile, the PJM region is anticipated to see a more modest growth of about 4% over the same period.
For small business owners, this uptick in electricity demand presents both opportunities and practical implications. The burgeoning need for electricity reflects an expanding marketplace, particularly for businesses involved in energy, technology, or manufacturing. As tariffs and pricing structures are likely to adjust in response to this rising demand, understanding these market dynamics will be vital for small business owners to navigate potential impacts on operational costs.
"After relatively little change in U.S. electricity demand between 2005 and 2020, retail sales of electricity have begun growing again," the report notes, suggesting a resurgence tied closely to the expansions in infrastructure and new business ventures. In particular, the forecast highlights that numerous developers plan to establish data centers and manufacturing facilities concentrated in the ERCOT and PJM regions, creating a ripple effect through local economies and supply chains.
Small businesses should pay heed to how these larger players affect their operations. The anticipated increase in electricity demand may lead to heightened electricity costs, making energy efficiency and cost management strategies increasingly important. Business owners might consider investing in energy-efficient technologies or systems that could mitigate energy consumption while sustaining productivity.
Moreover, the geographical focus of these developments could also affect local competition and market dynamics. For businesses established in or near Texas and the surrounding areas, the local infrastructure investments in energy supply can signify an advantageous climate for growth. Conversely, small business owners in states with fewer data centers might not benefit from the same level of economic stimulus, necessitating a review of their operational strategies.
Throughout the PJM region, which includes parts of the Middle Atlantic and South Atlantic, the increase in electricity sales could rise by 3% in 2025 and 4% in 2026 primarily due to the influx of new customers, particularly in Northern Virginia. This region is recognized for hosting one of the highest concentrations of data centers globally, indicating a positive shift for businesses serving this market.
Given these trends, small business owners should stay informed about potential regulatory changes, as government policies can play a significant role in shaping the energy landscape. As the EIA incorporates ERCOT’s and PJM’s monthly projections for power demand into its sales forecasts, continuous monitoring of these developments can empower entrepreneurs to make data-driven decisions.
Considering the influx of new developments, potential challenges will arise. Supply chains may feel pressure as larger entities consume vast quantities of power and local infrastructures adapt to accommodate this surge. Small businesses may find themselves vying for resources in a competitive environment that favors larger firms capable of negotiating more favorable terms with utility providers.
These projections underline the importance of proactive energy planning for small businesses. As competition increases and energy demands shift, being well-prepared can make the difference between thriving and merely surviving in a rapidly evolving market.
For further details and insights from the original analysis, visit the EIA.
Image Via Envato: DragonImages
