According to a new report from the U.S. Energy Information Administration (EIA), consumption of electricity in the U.S. commercial sector has recovered from pandemic levels, with annual U.S. sales of electricity to commercial customers in 2023 totaling 14 billion kilowatthours (BkWh), or one percent, more than in 2019.

However, the growth in commercial demand for electricity is concentrated in a handful of states that are experiencing rapid development of large-scale computing facilities, such as data centers. Electricity demand has grown the most in Virginia, which added 14 BkWh, and Texas, which added 13 BkWh. “Based on our expectation that regional electricity demand will grow, we revised our forecasts upward for commercial electricity demand through 2025,” said the EIA.

Commercial electricity demand in the ten states with the most electricity demand growth increased by a combined 42 BkWh between 2019 and 2023, representing growth of ten percent in those states over that four-year period.

These ten states are, in order of growth: Virginia, Texas, South Carolina, Arizona, North Dakota, Oklahoma, Florida, Utah, Nevada, and Oregon.

By contrast, demand in the forty other states decreased by 28 BkWh over the same period, a three percent decline. Although growth in the top ten states has been fairly consistent over time, commercial electricity consumption declined between 2022 and 2023 in a few because of mild summer weather.

As noted earlier, electricity demand has grown the most in Virginia, which has become a major hub for data centers, with 94 new facilities connected since 2019 given the access to a densely packed fiber backbone and to four subsea fiber cables.

Electricity demand also grew substantially in Texas, where relatively low costs for electricity and land have attracted a high concentration of data centers and cryptocurrency mining operations.

North Dakota stands out with the fastest relative growth at 37 percent (up 2.6 BkWh) between 2019 and 2023, attributed to the establishment of large computing facilities in the state. In addition, western states such as Arizona and Utah have shown robust growth in commercial electricity demand, further contributing to the overall increase in the top ten states.

In contrast, demand for electricity by the commercial sector in some large states has been flat or has declined compared with 2019. The five states with the most decline are, in order, Pennsylvania, New York, Illinois, New Jersey, and Maryland.

The EIA has made its largest revisions to the forecast in the South Atlantic and West South Central census divisions, which together account for 40 percent of U.S. commercial electricity demand. “We now expect that commercial consumption in the South Atlantic will increase by 5% in 2024 and 2% in 2025 and in West South Central by 3% this year and 1% next year,” said the EIA. “Other regions with strong growth in sales of electricity to the commercial sector include the West North Central and Mountain census divisions (both with forecast annual growth averaging 3% in 2024 and 2025).”

Nationally, the EIA expects U.S. sales of electricity to the commercial sector to grow by three percent in 2024 and by one percent in 2025. “Data center developments are evolving rapidly, and we plan to re-evaluate our upcoming forecasts as we receive more information,” said the EIA.