Utility Customer Engagement Has Never Been More Important

According to Deloitte, peak demand is expected to increase by around 26% by 2035, with data center demand alone accounting for nearly 176 GWs of demand by 2035. Driven by AI and data center developments, supply chain and tariff bottlenecks hindering critical infrastructure upgrades, and increased extreme and erratic weather events, residential electric costs have risen by 6.1% for customers, creating a political challenge and leading to cultural backlash. Courting those same customers has proven useful in developing demand flexibility programs like demand response, EV charging, and virtual power plants (VPPs), all useful load management tools designed to shift load to off-peak periods of demand or redistribute communally generated DER assets to repower the grid. With effective, transparent utility customer engagement, utilities can leverage an increasing array of behind-the-meter distributed energy resources to meet demand, enhance grid resiliency, and defray rising operational costs and customer rates.

Rising Bills & The Political Hot Potato

Since the start of 2025, electricity bills have risen by 11%, while the inflation rate remains at 3% and the U.S. unemployment rate is on the rise. Combined with market uncertainties caused by supply chain and tariffs and an erratic energy market, customer challenges are only beginning, which, for utilities, means increased economic uncertainty, credit risks for utilities, and energy insecurity for customers struggling. Altogether, customers have turned their attention to politicians to manage these increased costs, which will ultimately shape regulatory policies.

According to the J.D. Power 2024 U.S. Electric Utility Residential Customer Satisfaction Study, 39% of study respondents stated that they were worse off financially in 2024 than in 2023. Unfortunately, after more than a decade of stagnant change in electric consumption, demand is on the rise in 2025 with an outlook that promises further growth. A recent report noted that although smart thermostats have doubled over 8 years to reach 16% of households with internet access, only about 20% of those participate in demand response. In total, 54% of non-participants stated that they were unaware that demand response was even an option to begin with.

Types of Programs

Utilities manage distributed energy resources (DERs) using a distributed energy resource management system (DERMS). Grid DERMS manage utility-held DER assets like solar or battery installations. By contrast, Grid-Edge DERMS manage behind-the-meter (BTM) DER assets found in places like residential, commercial, or industrial properties. While utility-held DER installations have become the subject of regulatory and legislative review, BTM DERs represent great untapped potential for utilities eager to meet rising demand by leveraging customer participation in demand flexibility programs.

So what types of demand flexibility programs are out there, and how do they add value? Let’s take a look with consideration of optimal utility customer engagement strategies.

Conservation

Programs like demand response, EV charging, or BYOD programs function by curtailing (or ceasing) battery charging times or by shifting temperature set points to decrease demand during peak periods of consumption. For example, if a thermostat demand response program is run during the summer, utilities may lower temperature set points by 5 degrees, which lowers overall demand through aggregate conservation.

For conservation-oriented demand flexibility programs, center transparency and urgency as your utility customer engagement strategy. Make sure that customers are aware and remain in control of their outcomes, as customers who lose their autonomy during grid events have historically become angry. Instead, make sure to spread the message far and wide, explaining in clear detail the benefits of participation during grid events to bolster grid resiliency and defray peak market costs.

Redistribution

Two years ago, the Department of Energy released a report calling for an increase in VPP capacity from the 30-60 GW attributed primarily to demand response programs, to 80-160 GW by 2030 to meet rising demand. While VPPs can operate as conservation tools, through the use of solar inverters or batteries, virtual power plants or V2G charging strategies can also provide reciprocal paths to meeting rising demand by shifting stored, ambient energy back into the grid. Strategically, utility customer engagement messaging should address both the usefulness in enhancing grid resiliency, while providing valuable customer incentives to participants, usually without customers even noticing that events were called.

Utility Customer Engagement Has Never Been More Important: Conclusion

Among numerous concerns, the U.S. grid is challenged with a mismatch between generation and grid capacity. Utilities can enhance grid capacity while lowering the rising costs of power purchasing agreements and deferring costly infrastructure upgrades through effective utility customer engagement strategies. Remember: your customers are your most valuable resource.

About The Author

With almost two decades of leadership, growth marketing, and communication experience, Amber Mullaney drives the strategy behind Virtual Peaker's marketing initiatives. A proud Texan native, she graduated from the University of Houston with a degree in Public Relations and Interpersonal Communication. She is passionate and experienced in managing brands, product lines, marketing programs, and driving cross-functional teams.

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