The utility sector is under unprecedented pressure as it navigates aging infrastructure, a rapidly evolving regulatory landscape, climate-related disruptions, and surging demand from AI-driven investment. To thrive in this era of transformation, utility providers are embracing innovation and leveraging data solutions as part of a strategy to adapt and thrive.
Surging Power Demands Spur U.S. Grid Investment
The challenges facing utilities are stacking up. Many systems—such as water pipes, gas lines, and power grids—were constructed decades ago and are now showing signs of wear. The American Society of Civil Engineers estimates that crumbling infrastructure costs the U.S. economy billions of dollars annually in productivity losses. Their “Failure to Act” report series highlights that underinvestment in infrastructure could lead to a loss of over $10 trillion in GDP by 2039, significantly impacting business productivity and household incomes.
These vulnerabilities have already led to high-profile failures—like in February 2021, when Winter Storm Uri caused widespread outages in Texas. The grid, overwhelmed by extreme demand and unprepared for the cold, left millions without power for days. But infrastructure decay isn’t the only threat: explosive electricity demand from AI-driven data centers is further straining the grid. According to the Department of Energy, long-distance transmission capacity must quintuple over the next decade to keep up. U.S. electricity demand is expected to grow 3% annually for the rest of the decade—a pace unseen since the 1990s. While states like California, Texas, and New York are investing heavily in transmission, permitting and construction delays persist.
To address this, President Trump declared a National Energy Emergency, issuing executive orders to expedite long-distance transmission approvals. The goal: boost grid capacity, improve reliability, and remove permitting obstacles that slow infrastructure development. Christina Hayes, executive director of Americans for a Clean Energy Grid, called the reforms “a promising step toward meaningful change”, particularly for streamlining siting and permitting procedures. Larry Gasteiger, executive director of WIRES, underscored the urgency, stating, “It’s time to put a heavier foot on the gas pedal and get things moving.”
At the same time, the private sector is ramping up investment to meet demand. GE Vernova Inc. announced a $600 million investment in its U.S. factories and facilities over the next two years. With global energy needs expected to double, this funding aims to expand production, strengthen domestic supply chains, and develop advanced energy technologies to support the evolving grid. How these investments are deployed will depend on identifying optimal locations for new infrastructure, considering factors like population density, mapping rights-of-way, and environmental impact analysis, among others.
Extreme Weather Drives System Mitigation and Adaptation
Extreme weather events—such as the recent wildfires in Los Angeles and last fall’s hurricanes in the Southeast—have also exposed the fragility of utility infrastructure across the U.S. These disasters not only cause extensive property damage and service disruptions but also overwhelm aging energy grids, pipelines, and water systems, prolonging recovery efforts.
Recent data from NOAA underscores the urgency of the situation, revealing that the U.S. experienced 27 individual weather and climate disasters, each causing at least $1 billion in damages. These events collectively resulted in approximately $182.7 billion in damages and at least 568 fatalities, making 2024 the fourth-costliest year on record for such disasters. These events are becoming more frequent and severe, pushing utilities to confront an uncomfortable reality: current systems were not designed to handle these extreme events.
Building climate resilience is no longer optional for utilities—it’s a necessity. Risk to public- and property-safety means utility companies could face costly litigation and damage to infrastructure that threaten their investibility. Strategies like hardening infrastructure, implementing predictive analytics, and investing in renewable energy sources can help mitigate the risks posed by these events. In California, power companies have ramped up wildfire prevention efforts, including insulating and burying power lines, trimming trees, and using drones and risk-detection technology. These measures come as wildfires intensify, with California leading efforts to prevent fires caused by downed lines and faulty equipment.
Consumer Expectations are Evolving
Meanwhile, modern utility customers demand more than basic services; they expect transparent billing, renewable energy options, and efficient, real-time communication during outages. A report by McKinsey highlights that the billing-and-payments journey is a significant contributor to customer satisfaction in the utility sector.
As energy choices expand, utilities can enhance the customer experience by offering premium clean energy options (“greenness”) and time-varying rates, which adjust electricity costs based on demand and time of day. Failing to meet these evolving expectations can erode customer trust and loyalty.
One key challenge for utilities is boosting positive customer interactions especially during periods of high-volume service calls. Utility companies are actively trying to improve customer service by offering digital self-service options like mobile apps, online portals, and text notifications, allowing customers to manage their accounts, monitor usage, and receive updates on outages conveniently, often with the goal of reducing call volume to customer service centers and providing a more proactive communication approach. Optimizing service call routing based on customer location can improve response times and improve customer satisfaction.
Innovation and Opportunity for Transformation
In addition to responding to external forces and market drivers like demand and disasters, utility firms are proactively investing in technologies and data. For example, smart grids, digital twins, and advanced geospatial data are revolutionizing how utilities operate and plan for the future.
Smart grids, for instance, are equipping utilities with real-time insights to predict outages, optimize energy distribution, and reduce operational costs. Meanwhile, digital twins—virtual replicas of physical systems, assets, or processes—are used to simulate, monitor, and optimize real-world operations. They are powered by data collected from sensors, IoT devices, and advanced analytics, enabling a real-time or predictive understanding of how systems perform. Together, these technologies enable utilities to modernize aging systems without disrupting service.
The push for renewable energy also offers an opportunity to build a cleaner, more sustainable energy grid. Companies like Duke Energy and NextEra Energy are actively integrating battery storage systems to stabilize their grids while incorporating renewable energy sources such as wind and solar power. Duke Energy has approximately 90 megawatts (MW) of grid-tied battery storage in service and plans to expand to over 6,000 MW by 2035. NextEra Energy has developed projects like the Pinal Central Solar Energy Center in Arizona, which pairs a 20-MW solar facility with a 10-MW battery storage system to enhance grid stability and optimize renewable energy utilization. These initiatives help utilities reduce emissions and meet renewable energy goals while maintaining grid reliability.
At the same time, utility firms are increasingly relying on geospatial and environmental data to navigate regulatory complexities and climate risks. For example, mapping tools can help identify the safest and most cost-effective routes for new pipelines or power lines, avoiding flood-prone areas or sensitive habitats. During Hurricane Ian, several utilities used geospatial technology to pinpoint damaged infrastructure and restore service more efficiently.
Building a Resilient Future with Technology and Geospatial Data
Whether utilities firms take a path of expansion with more streamlined regulatory protocols, grid enhancements to shore up vulnerabilities, or the launch of strategic investments like the GE Vernova announcement, the sector is poised for an era of growth in the coming years.
As utilities face these opportunities, the sector is turning to technology and data-driven solutions to ensure a more resilient and efficient future. Investments in smart grids, digital twins, and AI-driven energy management are transforming how utilities operate, allowing them to optimize resources, prevent outages, and modernize infrastructure without disrupting service.
Geospatial data has emerged as a critical asset in this transformation. By integrating location intelligence, utilities can better plan infrastructure expansions, streamline permitting processes, and enhance disaster response efforts. Advanced mapping tools help utilities identify the best routes for new power lines, optimize grid performance, and improve response times for service disruptions. These insights also support the growing integration of renewable energy, ensuring a smoother transition to a cleaner, more reliable grid.
Ultimately, the utility sector’s ability to adapt and thrive hinges on key data. By leveraging advanced data solutions and geospatial intelligence, utilities can strengthen their resilience, enhance customer experience, and build a future-ready infrastructure that meets the evolving needs of businesses, communities, and the environment.
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