Looking Back at 2025: A Changing Energy Landscape

2025 was a year of extremes from weather to electricity demand. Climate-driven events, like the devastating Southern California wildfires, the uncharacteristic snowstorms across the South, or extreme flooding in Texas tested the resilience of the U.S. electric grid. At the same time, changes in federal clean energy policies and increasing electrification created a quickly changing environment that was hard for utilities to keep up with. 

In the beginning of 2025, Brillion predicted record-breaking demand, rapid data center expansion, clean energy growth and setbacks, importance of grid resilience and changing customer needs. Now, we look back on how those predictions played out and what it means for utilities in 2026. 

Record-Breaking Electricity Demand

Electricity demand surged in 2025. The U.S. Energy Information Administration (EIA) projected demand would grow by 2.4% in 2025. However, expectations were exceeded with heat waves, intense storms, and a colder-than-normal winter. Summer 2025 ranked as the third hottest on record while the traditionally mild Southern US experienced extreme cold and snow, further increasing electricity consumption.  

The North American Electric Reliability Corporation (NERC) warned that much of the U.S. power grid is at risk of supply shortfalls during wide-area heat waves and abnormal weather conditions. Additionally, retiring aging generators reduces the power available and adds complexity and energy limitations to available resources. This year, many regions saw voluntary conservation alerts and localized outages.  

Utilities were expecting demand growth, but climate-driven weather and increasing electrification made the need faster than expected.  

Data Centers and AI

One of the most consequential drivers of electricity growth was the rapid expansion of data centers and artificial intelligence workloads. AI adoption increased across nearly every industry, dramatically increasing the power needed to support the infrastructure. 

A study by Bain & Company projects that data centers could account for 44% of U.S. electricity load growth between 2023-2028. 2025 has shown these estimates aren’t far off, with states reporting data center clusters are pushing local grid capacity to its limit. 

A lot of the cost of this growth is being pushed onto customers with higher rate costs, as utilities need additional revenue to build the infrastructure needed to support data center loads. Bain predicts utilities need to generate 10-19% more revenue annually over the next decade to meet this demand. 

Utilities need to partner with data centers to manage the increasing load. Some strategies include: 

• On-site generation such as solar and battery storage 
• Flexible demand response programs specifically for AI workloads 
• New or updated commercial rate designs that promote off-peak computing 

One of utilities’ biggest challenges in 2026 will be bridging the gap between load growth and how ready the infrastructure is to handle it. 

Clean Energy Momentum Amid Federal Rollbacks

Federal clean energy policy brought a lot of uncertainty in 2025. There were rollbacks and changes to the Inflation Reduction Act (IRA), which brought more questions than answers for utilities planning for long-term clean energy strategies. However, global and private-sector investments are strong. The International Energy Agency reported investments in clean energy were twice those of fossil fuels, with the U.S. investing $400B toward clean energy compared to $187B toward fossil fuels.  

Corporate America helped move the clean energy transition along by expanding long-term clean energy procurement, and individual states advancing their own clean energy goals. An International Renewable Energy Agency report found that 91% of new renewable projects are cheaper than fossil fuel alternatives. Despite federal policy changes, adoption is still moving quickly.  

2025 reaffirmed the clean energy transition is driven by economics, not politics. 

Grid Resilience and Distributed Energy Resources (DERs)

According to the NERC, extreme weather is a leading risk to reliability. As a result, climate resiliency is no longer optional for utilities and they need to speed up investments in resilience planning and infrastructure upgrades. DERs played an important role in these efforts, supported by the U.S. Department of Energy which helped move along projects for energy storage, microgrid expansion, and grid resilience grants.  

Customer Experience as a Strategic Priority

The customer experience needed to be a top priority in 2025, but J.D. Power found utilities still failed to connect with customers on digital channels. Digital transformation is not just a “nice to have” anymore, it’s necessary to communicate efficiently and effectively with today’s utility customers.  

Utilities should invest in self-service portals, real-time alerts, clear high-bill explanations, streamlined rebate applications and workflows, and personalized communications that are backed up by data and analytics. J.D. Power consistently shows utilities that prioritize digital experiences outperform their peers in customer satisfaction and trust.  

It is also essential for utilities to treat customers as partners, not just ratepayers, in the face of climate change. Customers are a critical resource for utilities to help with grid management from demand response and energy efficiency programs to rooftop solar and battery storage. With rising bills, demand, and expectations, customer experience needs to be a top priority in 2026.  

Looking Ahead: 2026 and Beyond

2025 brought a few key themes into focus:

• Electrification is accelerating faster than expected and demand is only going to grow with everything from EVs to AI.
• Distributed energy is no longer optional and demand response programs are key to a reliable grid as utilities navigate climate-driven extreme weather.
• Customers are essential partners for utilities to meet their goals from customer programs to digital engagement, they help with grid stability and sustainability goals.

Success for utilities in 2026 means carrying these lessons forward, planning smarter, collaborating better, and modernizing infrastructure. 2025 was a year for innovation, learning and transition. Utilities that embrace these changes will be in a better position to meet the needs of growing demand, clean energy, and build a more resilient and customer centered grid in the face of uncertainty.