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FERC staff: 2025 saw higher gas and power prices as demand, exports and data center loads rose
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Summary
FERC staff presented the 2025 State of the Markets Report, reporting a 67% rise in Henry Hub prices and notable electricity demand growth driven in part by data centers; commissioners pressed staff on pipeline capacity, storage and transmission as responses to price volatility.
FERC staff presented the 2025 State of the Markets Report at the Commission’s March open meeting, telling commissioners that wholesale natural gas and electricity prices rose in 2025 amid higher demand, lower storage levels and growing exports.
Eric Primash of FERC’s Office of Technical Reporting and Economics said the average Henry Hub price in 2025 "averaged $3.54 per million British thermal unit, up from $2.12 per MMBtu in 2024," and attributed the increase principally to cold weather events and below‑average storage. Staff also reported a 4.6% rise in natural gas demand and increases in production and certificated storage capacity for 2025.
Alondra Valdez, who led the electricity presentation, highlighted that U.S. electricity demand grew about 2.3% year over year and that data centers accounted for a substantial share of new load: the report estimated over 50 gigawatts of data center capacity in service by 2025 and a 24% compound annual growth rate since 2020. Staff noted interconnection queues still hold more than 2,100 gigawatts of active capacity and that 56 GW of nameplate capacity came online in 2025, largely solar and storage.
Commissioners used the presentation to press staff on causes and responses. Chairman Sweatt asked whether more pipeline capacity would lower market area prices; Mr. Primash answered that pipelines, storage and additional generation can help reduce prices in regions where pipeline constraints create scarcity pricing, but cautioned that day‑to‑day prices depend on multiple factors. Commissioner Rosner focused on transmission, noting less than 15% of the new circuit miles were high‑voltage projects capable of moving power regionally and asking whether building transmission at higher voltage would better reduce costs; staff said additional generation and transmission investments would be important alongside pipeline and storage additions.
The report will be posted on FERC’s website. Commissioners and staff also referenced planned follow‑up work including a technical conference on implementing EQR changes and continued monitoring of interconnection queue reforms such as SPP’s consolidated planning process.
