Each month, I try to think of topics to write about that would benefit cooperative members. This month I received a nice letter from a reader, Curtis in Mount Vernon, who is a member of First Electric Cooperative like me. Curtis’ letter was the inspiration for my article this month. In his letter, he explained that he enjoys reading my personal stories of growing up in rural America with rural values, and he particularly enjoys informative articles about “energy-related matters.” And here I thought those were boring and members might not enjoy them as much.
President John F. Kennedy popularized the phrase “a rising tide lifts all boats.” It was originally a fisherman’s expression and, given that Kennedy spent his summers at Cape Cod, it makes sense that it would resonate with him. He was communicating that economic growth is good for all who participate in the economy.
America is in the midst of historic electric load growth, with electricity consumption reaching an all-time high in 2024, according to the U.S. Energy Information Administration (EIA).
For the last 20 years, America has experienced flat to declining electric load growth. As energy-intensive industries shipped overseas to China and as modern buildings, homes and appliances got more efficient, the electric load in America stayed constant. During this time, regional transmission organizations (RTOs) came into existence. Their premise was that an electric system in which all utilities in a regional footprint share resources would be more efficient than each individual utility owning and operating its own independent systems.
In the independent model, each utility needs to have reserve resources available to supply its members or customers in the event a power plant failed. The RTO system figured out that there was a lot of excess power generation, and if everyone shared resources, we could run the system with fewer power plants more economically. This strategy worked great for 20 years, when there was little to no load growth.
Consequently, to achieve these economics, power plants were shut down. This also gave rise to intermittent resources, like wind and solar, to supply subsidized, low-cost energy with no requirement to provide capacity since there was no growing electric demand. Demand is a measure of how much can be provided instantaneously at any given moment, whereas energy is a measure of how much is delivered over a period of time. Demand is like pressure in the hose, and energy is like how much water flows through the hose. More electric demand requires more power generation to meet that demand to keep the voltage up on the grid, similar to maintaining pressure in the hose.
In 2020, the COVID-19 pandemic revealed that America had deindustrialized too far and had become too dependent on critical materials. Then in 2021, Winter Storm Uri flipped the 20-year RTO model on its head, serving as a wake-up call for many in the electric industry, including regulators. Now, as the pendulum swings back toward industrialization, coupled with the push for electric vehicles and the advent of artificial intelligence (AI), there is a surge in electricity demand that is unprecedented in U.S. history. A recent Grid Strategies report forecasts that five-year load growth will spike from 23 gigawatts (GW) to 128 GW by 2029. Similarly, an analysis by the international management consulting firm ICF predicts that U.S. electricity demand will grow 25% by 2030 and 78% by 2050. A GW is 1 billion watts — enough to power about 700,000 homes or a large data center campus like the one Google has announced in West Memphis.
However, the U.S. grew complacent in the 20 years when we experienced no electric demand growth and, during that time, shut down over 150 GW of coal and 9.4 GW of nuclear power generation. Additionally, utilities across the U.S. have plans to close another 81 GW of coal plants by 2030, including 3.2 GW here in Arkansas. The Arkansas plants are closing due to a lawsuit filed by the Sierra Club, and the resulting settlement requiring that 1.6 GW of coal will close in 2028 and an additional 1.6 GW in 2030. This means that electric rates will increase in Arkansas to switch from coal to gas before we even begin to engage in this new economic development with its increased electric demand.
Across the country, the rising tide of electric demand growth is most definitely raising all boats, meaning electricity prices are increasing everywhere. With all the coal and older nuclear plants that have been shut down, new power plants must be built to meet this demand, and new power plants cost a lot more than older fully depreciated power plants.
Recently, KARN’s morning show host Toby Howell asked me if energy prices were rising faster in Arkansas than in other states. I was proud to say, “No, they are not. Actually, our boats are rising slower than everyone else’s.” Arkansas has some of the lowest rates in the nation, with average rates of 12.30 cents per kilowatt-hour (kWh), which is 26% below the national average of 16.73 cents per kWh.
From 2023 to 2024, national electricity rates rose by an average of 6.5% while Arkansas rates held steady. So far in 2025, national energy rates have increased by 3.7%, while Arkansas rates on average are predicted to increase by about 7% compared to 2024. However, Arkansas rates rose 3% less than the national average over the last two years and are less than many other states. So far in 2025, Arkansas’ electric rates rank 44th in the nation, with Hawaii being first at 41.03 cents per kWh and California being second at 35.03 cents per kWh.
The Electric Cooperatives of Arkansas are committed to providing our members Reliable, Affordable and Responsible power, and I can assure you that it is all-hands-on-deck as we work hard to figure out Kennedy’s rising tide challenge. The challenge will be: How do we engage in the rising tide of economic growth that raises all boats and benefits members while also ensuring that the subsequent rising tide of energy demand does not raise our boat (electric rates) as high as others?