U.S. AI Adoption and Electricity Prices: Planning for 2026

A recent survey conducted by Menlo Ventures, a venture capital firm, found that more than half of adults in the U.S., 61% to be exact, have used Artificial Intelligence (“AI”) in the past six (6) months. Clearly, Americans are becoming more comfortable with the technology. Perhaps more notable, the same study found that nearly one in five U.S. adults rely on AI daily—often for work-related tasks. According to Secondtalent, a global talent platform for AI software engineers and tech professionals, which synthesized data from Stanford’s AI Index, Tortoise Global AI Index, and IMD’s Digital Competitiveness Rankings, enterprise AI adoption exceeds 85% in the U.S. This may be driven by sectors such as Technology/Software, Financial Services, and even Healthcare/Pharma—which have AI adoption rates of 92%, 85%, and 78% respectively (source: Statista). Very interestingly, the American Medical Association (or “AMA”) reports that as of 2024, nearly two-thirds of physicians surveyed, 66% according to their findings, stated that they use AI for at least one of 15 common use cases. It appears as though the technology is being utilized and subsequently affecting industries economy-wide. It’s worth noting that these figures reflect different definitions of “adoption,” ranging from consumer usage to enterprise deployment and national self-reported metrics.

To put these figures in context, adoption rates of AI rose 1.2% in the second half of 2025 to 16.3% from the 15.1% observed by Microsoft in the first half of the same year. According to their report, global leaders included the United Arab Emirates (“UAE”) and Singapore, with adoption rates of 64.0% and 60.9% respectively. Clearly, the United States has room to run in terms of uptake. This has been an intensely debated topic in the utilities industry, which is often responsible for providing electricity to the power-intensive data centers required to process the computationally intensive models that enable AI. How much generation, transmission, and distribution infrastructure will be required to power this rapidly growing technology?

Indeed this has been one of, if not the biggest concern in utility industry circles. According to Utility Dive, markets in Texas and the Mid-Atlantic in particular, have observed significant increases in electricity demand forecasts due to new interconnection requests. One of the interesting developments has been the rise in speculative requests by data center developers leading to significant downward adjustments to generation and demand projections when some applicants inevitably choose lower rate utilities. As a result, the U.S. Energy Information Administration was forced to revise down their electricity generation growth forecast for 2026. The rate of growth is increasing but not as fast as utility interconnection queues and demand projections would indicate.

Is it possible that we will see unnecessary infrastructure buildout similar to that caused by the exuberance related to the dot-com bubble? During the late 1990’s, as one analysis noted, “the tech and energy industries massively overestimated how much power the Internet would need, leaving utilities and ratepayers on the hook for underutilized assets”. Peak Utility Advisors believes that access to information and technology should hopefully prevent or buffer the financial impacts of another wave of stranded assets. However, much like most of those involved in the industry, our firm will be watching regulator, transmission operator, system operator, and utility reports/forecasts closely.

Much has been made in recent months about the rapid rate of increase of observed inflation of energy services (energy provided by utilities). Across the country, 56 electric utilities have or are proposing rate increases nationwide and electricity service prices have risen 6.9% on an annualized basis. Interestingly, energy commodities, including wholesale electricity, across the country have mostly decreased in price. This supports the idea that electricity infrastructure investments are the main contributor to the high rate of price increases. Fixed costs incurred by utilities are usually compensated with a profit (for Investor Owned Utilities or “IOUs”), as compared to the commodities supplied, which are usually sold at cost.

This may explain why the current federal administration has directed certain coal-fired generation units to remain operational, as they have in Colorado. Here in our state, Tri-State Generation and Transmission Association, a wholesale electric power supplier, and its other owners (mostly utility companies) were ordered to keep their 446-MW Craig Unit 1 operating for at least 90 days after it was slated to be retired on Jan. 1st, 2026. Although the estimated cost of the 90-day extension may reach as much as $21M, this cost may end up paling in comparison to larger investments into new generation capacity that could become stranded, should forecasts end up significantly over projected versus actual new demand from AI load growth.

While Peak Utility Advisors strongly supports coal-fired power plant retirements due to the significant economic and environmental benefits, this decision may unfortunately end up being the lowest cost option to serve the electricity demand increases from AI’s power-hungry computational needs in the short term. As more accurate data continues to roll in, it will become easier to predict future electricity needs and build out major clean energy solutions that can serve the increased load. Otherwise, electric generation capacity that is built to meet the demand growth from AI may not even run or be utilized, should there be significant overbuilding of power plants and infrastructure.

Contact Information:
Matt Jochym
Advisor/Founder
(M): 970-235-1098
(E): matt.jochym@peakutilityadvisors.com
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