If you’re opening your December electric or gas bill and doing a double-take, you’re not alone. Across much of the U.S., wholesale natural gas and power prices have jumped to near three-year highs just as the first major cold snap of the 2025–26 winter hits.
There isn’t a single culprit. Instead, several big forces are stacking up:
- Surging electricity demand from AI data centers
- Rapid growth in liquified natural gas (LNG) exports
- Very cold early-winter weather pushing up heating and peak power demand
On top of that, long-term grid and capacity constraints are limiting how easily the system can absorb all this new load.
How Much Is AI Really Driving Up Demand?
Data centers already used roughly 4% of U.S. electricity in 2024, and their demand is expected to more than double by 2030. Forecasts show U.S. data-center power demand rising from the mid-30-GW range in 2024 to more than 60 GW by the end of 2025 — a striking year-over-year jump.
Most of that increase is not “ordinary” IT load. It’s GPUs training and running AI models around the clock. Because these facilities run 24/7, they don’t just raise annual energy use — they extend and flatten peak periods, forcing utilities and grid operators to procure more expensive peak-capacity resources.
This shows up for customers as:
- Higher wholesale power prices during peak and near-peak hours
- Higher capacity charges in organized markets
- More volatility in winter and summer peak seasons
AI isn’t the only driver of demand growth — but in 2025 it’s the new load big enough to move the market.
LNG Exports Are Tightening the Gas Market
Natural gas still sets the marginal power price in many regions. When gas prices rise, electricity usually follows.
In late 2025, U.S. LNG exports hit record highs, with multiple liquefaction facilities operating near full capacity. Federal forecasts now show LNG exports averaging roughly 15 Bcf/day in 2025 — more than 25% higher than the previous year.
Winter is when LNG’s impact is most sharply felt. U.S. heating demand peaks at the same time overseas buyers bid aggressively for LNG cargoes. As export volumes rise, domestic gas prices are more sensitive to global market swings. That ripple effect pushes wholesale electricity prices higher in gas-dependent regions.
The First Real Cold Snap Is Here
Layered on top of structural trends, weather still matters — a lot.
December 2025 is bringing the first widespread cold blast of the winter season, driving up heating load and tightening natural gas storage balances. When a cold pattern hits early, it increases market anxiety about ending the winter with adequate storage, which often pushes futures and spot prices higher.
In regions with pipeline constraints, this can create sharp basis spikes — short periods where local gas and power prices surge. Those spikes filter into both default supply rates and market-based contracts.
Other Under-the-Radar Drivers
A few additional factors are quietly adding pressure:
- Generator retirements: Coal plants continue retiring faster than expected, leaving gas as the main dispatchable backup to renewables.
- Transmission bottlenecks: New solar and storage capacity often sits in interconnection queues or behind congested lines, delaying access to cheaper clean energy.
- General electrification: Industrial growth, electric vehicles, building electrification, and population growth all contribute to higher year-round load.
Individually, none of these would cause a December price spike — but collectively, they reduce slack in the system.
Are We Building Enough New Capacity to Catch Up?
There is good news: 2025 is a record-setting year for new renewable and storage capacity.
Developers are expected to bring over 60 GW of new utility-scale generation online in 2025, much of it solar paired with batteries. Over 80% of that new capacity is carbon-free. The rapid expansion of solar-plus-storage is beginning to lower energy costs during midday hours and reduce reliance on gas-fired plants in shoulder seasons.
However, timing and geography matter. AI-driven load growth and LNG export demand are strongest in regions where transmission is already tight. Even with record additions of renewables and storage, demand is growing faster in the hours and locations where the grid is most stressed.
In other words: the U.S. is building capacity — but not always where and when it’s needed most.
What Building Owners and Managers Can Do
In this environment, “riding it out” is expensive. Practical steps we’re helping clients with include:
- Securing competitive multi-year fixed-price electric and gas supply
- Leveraging incentives for efficiency upgrades and solar enrollment
- Stress-testing BEPS, benchmarking, and compliance strategies against higher long-term energy prices
AI, LNG exports, and cold weather are combining to make December 2025 an expensive month for energy. But with the right procurement strategy and targeted efficiency and solar projects, building owners can navigate a volatile market and position themselves for long-term savings.