Record Power Demand, Even After Texas Hit Pause

The US Energy Information Administration does not use words like boom. Its September Short-Term Energy Outlook, published on 9 September 2026, says that electricity generation will set a record this year and another next year, and that the fastest-growing region is the one whose governor just froze new data-centre connections. Both statements are true, and together they describe an industry that has outrun the political process meant to manage it.

The forecast

EIA expects US electricity generation to grow 2.2% to a record 4,368 billion kilowatt-hours in 2026 and a further 1.7% in 2027. Retail sales reach 4,135 billion kWh this year, up almost 2%, and 4,211 billion in 2027. Demand, the agency says, is particularly strong in the West South Central region, from data-centre development and increased manufacturing activity. Reuters, using EIA's total consumption figures which include direct use, puts the path at 4,195 billion kWh in 2025, 4,270 in 2026 and 4,349 in 2027, with residential and commercial sales both at new records.

The mix shifts slowly. Natural gas holds at 40% of generation in both years; coal falls from 17% in 2025 to 16% and then 14%; nuclear stays at 18%; solar rises from 7% to 8% to 9% and wind from 11% to 12%. First-half 2026 data show solar generation up 21%, wind up 6% and coal down 11% year on year. EIA expects gas generation up 2% this year and 3% next, with Henry Hub averaging $3.43 per million BTU in 2026.

What Texas did

On 3 August Governor Greg Abbott directed the Public Utility Commission of Texas and ERCOT to audit all data centres in the interconnection process before any more advance. Reuters reported that ERCOT was reviewing about 474 GW of proposed load, more than five times its record peak, with about 90% from data centres, and that the grid operator postponed its Batch Zero transmission-planning study. 'Simply put, Texans must come first,' Abbott wrote. ERCOT told regulators on 20 August that verification will not be complete until December; the interconnection study was never expected before April 2027.

EIA's response was immediate. Its electricity outlook states: 'As a result, we have lowered our forecast for electricity demand in Texas, with electricity load growing by 6% in 2027 in contrast to our forecast of 14% growth in the previous STEO.' Even so, EIA writes, the West South Central region 'accounts for the largest share of total electricity sales growth in our forecast'.

The wider picture

NERC expected 2026 peak demand to be 11 GW higher than 2025, largely because of data centres, even after operators trimmed summer forecasts for slower-than-expected large-load completions. The IEA's Electricity 2026 report projects US demand growing nearly 2% a year to 2030 with about half of the increase from data centres, and its Energy and AI update reports global data-centre electricity demand up 17% in 2025 with AI-focused facilities up 50%. In California, the legislature passed SB 886 on 9 September, requiring the utilities commission to adopt data-centre tariffs by 2028 that prevent cost shifts; it awaits the governor.

Who benefits, who is at risk

Beneficiaries: gas generators and pipeline operators, whose share holds through 2027; solar developers, whose output is growing fastest. At risk: data-centre projects in Texas whose timelines now depend on a December audit and an April 2027 study, and forecasters everywhere whose numbers rest on queues that may be paused.