Yes, this is a common expression in American English and is used mostly to mean that a person is releasing some form of stress, which is usually related to anger or other emotions that have built up over time. The way the stress is released may be seen by the person yelling, crying, or extra exercising in some form, for example. Example: When I get upset, I have to go for a walk to let off steam and clear my mind!
As for excessive energy, in American English, we do not use this expression. We say “to burn off energy”. Example: Because the children could not sit still in the doctor’s office, the father took them outside to play and burn off some energy until the mother was done seeing the doctor.”