May 2, 2025 Shifts in Utilities: Adapting Through 2025 and Beyond

Utilities shift from reactive to proactive—tapping into AI, IoT and data to boost resilience, cut waste and drive decarbonization.

By Matthew Smith, Itron, Inc.

The utility industry is undergoing a transformation driven by advancements in artificial intelligence (AI), evolving environmental policies and shifting economic dynamics. These forces open new opportunities for utilities to modernize their operations, strengthen grid resilience and accelerate decarbonization.

Utilities are positioning themselves for these new opportunities by embracing smarter resource management and predictive technologies. The coming years will be defined by proactive strategies that enhance operational efficiency, meet growing customer expectations and drive long-term industry evolution.

Establishing an End-to-End Management Pipeline

To navigate this evolving energy landscape, utilities are embracing a more holistic, integrated approach to resource management. Moving away from traditional operational silos, they are adopting end-to-end visibility across the entire energy lifecycle—from generation and distribution to consumption and billing.

This interconnected system enhances efficiency by providing real-time data analysis, enabling utilities to optimize resource allocation, reduce waste and improve customer engagement. Advanced technologies such as IoT-enabled automation devices, sensors and smart metering play a critical role in this transition, shifting utilities from reactive problem-solving to proactive decision-making for long-term sustainability and resilience.

A key component of this approach is reducing resource waste. By deploying advanced metering infrastructure (AMI) and IoT-enabled sensors, utilities can detect inefficiencies in real time. For example, water utilities that integrate leak detection sensors can prevent millions of gallons of wasted water annually. In California, a case study found that utilities using AMI reduced daily water consumption by 5.24 gallons per household, translating to an average savings of $60 per year per home.

The final stage in the energy journey is improving the billing experience. An integrated billing platform provides consumers with a comprehensive view of their water, gas and electricity usage. It allows them to monitor consumption, identify cost-saving opportunities and access tailored energy-saving recommendations. These capabilities enhance customer engagement and promote better energy habits, ultimately driving a more sustainable and efficient energy future.

From Reactive to Proactive: The Greatest Utility Transformation

The utility industry is shifting from a reactive to a proactive management approach, leveraging artificial intelligence (AI) and machine learning (ML) to analyze historical data alongside real-time inputs. These advanced technologies help utilities identify high-risk areas, optimize deployment strategies and enhance operational efficiency by pre-positioning repair crews ahead of severe weather events or reinforcing infrastructure to mitigate disruptions. According to a McKinsey report, transmission and distribution utilities who leveraged analytics experienced savings of 10% to 20%, while also improving their overall reliability and performance.

A critical enabler of this transformation is the growing adoption of distributed intelligence. Edge devices, such as smart meters and IoT-enabled sensors, coordinate with one another and provide real-time insights into grid conditions, allowing utilities to detect potential failures before they escalate. This data-driven approach enhances outage isolation, accelerates decision making and enables faster service restoration with minimal manual intervention. Utilities can improve grid efficiency while reducing operational costs and downtime by harnessing these technologies.

The Next Big Investment: Grid Resilience

Grid resilience remains a top priority for utilities in 2025, driving strategic investments in digital and physical infrastructure to enhance reliability. Intelligent connectivity solutions, such as private cellular and mesh networks, are crucial in real-time monitoring and communication, enabling utilities to detect and respond to grid faults more quickly. The latest generation of network technology is designed to improve resiliency and reliability of networks as the operational importance of these devices increases. This increased responsiveness helps minimize downtime and improve customer satisfaction.

On the physical infrastructure front, hardening initiatives—including undergrounding power lines and using reinforced materials like concrete poles—are gaining traction. These projects are increasingly supported by local, state and federal agencies, such as the Federal Emergency Management Agency (FEMA), which provides funding for resilience projects to safeguard critical energy infrastructure. A notable example is Florida Power & Light’s Storm Secure Underground Program, which has buried 99% of the main power lines serving essential facilities such as hospitals, police stations and emergency medical services, significantly enhancing storm resilience.

Decarbonization: Factors, Demands and the Future

At this year’s World Economic Forum, France’s Minister for Industry and Energy, Marc Ferracci, described decarbonization as “the biggest challenge in centuries.” The ongoing push for decarbonization is driven by regulatory policies, shifting consumer expectations and economic incentives.

The declining cost of renewable energy—including wind, solar and battery storage—has made clean energy increasingly competitive with fossil fuels. According to the 2023 Renewable Power Generation Cost Report from the International Renewable Energy Agency (IRENA), the cost of solar photovoltaic has dropped by 90% since 2010. In response, utilities continue to advance renewable adoption driven by cost-effectiveness, state regulatory mandates and the need for grid resiliency amid increasing energy demand. On the consumer side, the demand for solar energy is surging. As of 2023, over 219 gigawatts of solar capacity had been installed across the U.S., enough to power more than 37 million homes, according to Solar Industry Research Data.

Another key driver of decarbonization is the rise of electrified transportation. In its 2024 Global EV Outlook, the International Energy Agency (IEA) reported that one in five cars sold globally in 2023 was electric. While 2024 figures are still being compiled, early estimates suggest nearly 17 million EVs may have been sold.

Government incentives and infrastructure investments fuel this rapid EV market expansion. Programs like California’s Clean Vehicle Rebate Project help reduce upfront costs for consumers, while public-private collaborations, such as Electrify America, continue to expand charging networks to combat range anxiety. Additionally, PG&E’s EV Connect pilot program addresses a key adoption barrier by subsidizing necessary home electrical upgrades for EV owners, making charging more accessible and affordable.

Plugging into the Future

The utility industry is undergoing profound transformation, driven by advances in operational technology, grid resilience efforts and decarbonization initiatives. As climate challenges intensify, customer expectations evolve and policies shift, the stakes for utilities have never been higher.

To navigate this dynamic landscape, utilities must not only embrace innovation but also adopt a proactive, integrated approach—one that enhances reliability, improves efficiency and paves the way for a more sustainable energy future. By leveraging cutting-edge technologies and data-driven insights, utilities can turn challenges into opportunities, ensuring they remain resilient and ready for what’s next.

About the Author:
Matthew Smith is a Senior Director of Marketing at Itron, Inc. Matthew has over 30 years of entrepreneurial experience in the energy, home computer, and consumer electronics industries. At Itron, Matthew sets the global business and product strategy for the network platform line-of-business.

Subscribe to Industry Today