As energy consumption rises, the electric utility sector is facing intense pressure to enhance operational efficiency and improve the customer experience to meet evolving demands. With automation and an array of other technological advancements being implemented globally, electric utility companies must innovate to meet customer expectations. This traditionally regulated sector must now navigate the complexities of digital transformation to avoid the risk of falling behind. While this transition requires significant time, planning and buy-in, the adoption of digital tools is essential for maintaining operational resilience and meeting the evolving energy needs of customers.

Enhancing customer service

One of the key reasons electric utility companies should embrace digitalization is to enhance customer service. Because consumers rely so heavily on electricity, electric utilities are expected to deliver robust, exceptional customer service in real-time. This is an essential priority for the sector, with about 16% of the top 25 utilities already in the initial stages of integrating generative artificial intelligence (AI) into their operations to improve customer service, along with a multitude of other operational enhancements. Electric utility companies must embrace the implementation of automated and AI technology to keep pace with the customer service being delivered by competitors.

To meet the pressure from customers for better digital options, electric utility companies can implement self-service automation tools such as chatbots, which offer instant, personalized interactions and reduced response times. These tools are particularly effective for routine and less complex issues such as outage status updates or billing inquiries, where chatbots can provide immediate responses by accessing customer data.

Mobile technologies, such as self-service apps, further elevate the customer experience by providing real-time access to usage data, putting critical information at customers’ fingertips and allowing them to conveniently check outage status, report issues and manage billing. The ability to monitor and report outages directly in the app not only empowers customers but also helps electric utilities by receiving immediate feedback from customers, which can help the company identify issues more promptly. Mobile apps also can provide additional channels to communicate with companies through live service agents and/or chatbots, saving time for both the company and the consumer. Additionally, mobile apps offer valuable insight into how customers interact with the company, which will allow the utility to cater to individual customer needs and improve its services.

It’s also important for electric utility companies to offer specialized tools tailored to the needs of each type of customer, extending their focus beyond just residential customers. For example, municipalities manage critical infrastructure such as traffic lights, schools, jails and hospitals, requiring more in-depth data tools to make informed decisions. By providing municipalities with customized solutions like individual portals, aggregated accounts, detailed usage data and specialized map views to visualize larger service areas, utilities can help cities operate more efficiently and cost-effectively. This, in turn, benefits residential customers by improving the delivery of public services. Similarly, commercial customers, such as airports, can use these specialized tools to enhance their operations, especially during storm situations. By offering tailored tools that address the unique needs of all types of customers, electric utility companies build goodwill and trust and support the resilience of critical infrastructure during emergencies.

These digital tools are not only useful in providing instant resources for customers but also allow employees to focus on more sophisticated issues or tasks, making utility operations more efficient.

Operational efficiencies

Another critical objective for electric utilities to adopt digital technology is to enhance operational efficiencies. Specifically, predictive AI solutions minimize downtime and costs by using performance data to predict equipment failure and availability, allowing companies to avoid expensive repairs by identifying issues early. This allows for more regular maintenance, reducing the need for costly emergency repairs and preventing major service disruptions. Additionally, data from smart meters enable companies to improve decision-making when forecasting, including predicting the potential impact of upcoming weather events.

Looking ahead, generative AI and other automated models are expected to expand the industry’s capabilities as they are used for complex data analysis, forecasting, optimization and more to help address some of the major issues that plague electric utility companies.

Leveraging mobile technology not only improves the customer experience but also enables efficiencies for employees who work on the front lines of the utility organization. Mobile apps designed for the field allow employees to improve response times, manage assignments and update work status in real time. These apps streamline the scheduling of appointments, provide arrival updates and collect customer feedback, offering a personalized experience tailored specifically to each employee.

Other digital tools, such as Internet of Things (IoT) sensors, allow field workers to remotely monitor and perform diagnostics. For the electric grid, IoT enables real-time monitoring and can alert workers about possible issues before they happen, helping prevent major blackouts and accidents. Geographic Information System (GIS) technologies are also valuable, permitting utilities to maintain comprehensive records of assets, including for transformers and distribution points while providing asset data, personnel locations and detailed geographic information. In order to ensure field workers can effectively utilize these digital tools, electric utility companies must ensure their workforces are equipped with the right hardware. Whether that is tablets, rugged laptops, internet in trucks, etc., field workers must be equipped with devices to take advantage of these digital tools that enhance complex operational processes and improve the overall field experience.

Optimize the supply chain

As the electric utility industry is experiencing unparalleled demand due to population growth and increased electrification, utility companies are challenged to build out necessary infrastructure to keep up with this rising demand. The post-COVID era has also brought significant volatility to global supply chains, making it that much more difficult for utilities to effectively manage their operations. Since the pandemic, the electric utility industry has seen an increase in lead times and rising equipment costs driven by supply constraints due to heightened demand and geopolitical instability. As electric utility companies look to upgrade their equipment, for some equipment, the average lead time for delivery has tripled from what it was two years earlier, reaching 52 weeks in some cases. Additionally for necessary equipment such as transformers, prices have almost doubled since January 2022. Electric utilities must adapt to these new market dynamics while ensuring that they can continue to meet the evolving needs of their customers.

Along with supply chain challenges, climate change presents another significant obstacle for the electric utility sector. The increasing frequency and severity of devastating weather disasters – such as hurricanes, wildfires and flood – pose a direct threat to utility infrastructure and global supply chains. These catastrophes can cause suppliers to be offline or significantly delay shipments, further exacerbating the supply chain volatility that the industry is already facing. This increasing risk of natural disasters puts significant pressure on utilities to optimize their supply chains to ensure they can withstand these challenges and leverage technology to adapt quickly to changing supplier landscapes. As electric utility companies continue to face more frequent and severe weather events, their ability to maintain continuous service is paramount, and the reliance on digital technology is even more critical.

Given the growing complexity of the supply chain in the utility industry, electric utility companies must turn to digital technologies to optimize their operation and safeguard themselves against future challenges. Digital technologies can help utilities navigate supply constraints and increasing demand by effectively utilizing data and AI technologies, allowing them to optimize their supply chain processes and improve decision-making in an era of unprecedented market volatility.

One key technology for supply chain optimization is the use of data lakes, which give utilities the capability to break down the silos between different internal departments and operations. Data lakes allow utilities to centralize and integrate data from across the supply chain, including data from procurement, logistics, operations and finance. This then provides a comprehensive view of the company’s supply chain performance enabling the utility to monitor and evaluate key indicators in real-time. This holistic view allows utilities to make data-driven decisions that will help reduce risks and address any bottlenecks before they become a larger issue.

Another technology that can transform supply chain optimization is AI, particularly in the realm of decision intelligence. Technologies like machine learning and predictive analytics can process large amounts of data from multiple sources, which provides actionable insights to help utilities identify improvement opportunities. Decision intelligence takes this a step further by automating decision-making processes, so employees can rely on this technology to make smaller optimizations while focusing on more complex supply chain operational decisions. For example, AI can analyze supplier performance patterns, forecast demand and predict potential disruptions based on external factors like weather events stemming from climate change. This then allows electric utilities to adjust their procurement strategies, find alternative suppliers and allocate resources effectively, while at the same time minimizing downtime and reducing costs. Leveraging AI and data analytics gives electric utility companies a competitive edge in today’s volatile market, empowering them to build more resilient and agile supply chains. As the industry continues to navigate the challenges stemming from today’s supply chain landscape, adopting digital tools and these technologies are pivotal in achieving long-term success.

Investment in security

While digitalization offers numerous benefits, it also increases the risk of cyber-attacks. With technology driving utility operations, a cyberattack against critical infrastructure, especially the power grid, could cause catastrophic consequences. With the recent increase in vulnerabilities, the grid’s virtual and physical weak spots grew to a range of 23,000 to 24,000 last year from 21,000 to 22,000 by the end of 2022. That increase demonstrates why there is a great need for the industry to invest in new technologies to protect from these mounting threats. Securing the electric grid is a top priority for the sector and electric utility companies must invest in advanced digital tools to protect their infrastructure and ensure resilience against emerging threats. Utilities can implement tools such as automation, AI and machine learning to fortify their organizations and safeguard against cyberattacks.

Automation enables faster threat analysis, allowing utilities to swiftly identify and respond, potentially saving the utility from data breaches and significant financial losses. Automation can streamline routine security tasks and address threats in real-time through analysis engines that detect unusual traffic patterns and data flows. Automated security technologies, as well as AI, also help reduce human error, which is crucial as professionals try to keep up with the increased volume of attacks. AI can quickly identify threats and monitor a wide range of potential cyber issues efficiently. Additionally, machine learning algorithms can continuously decipher data patterns and network behavior, identifying inconsistencies that signal a potential cyberattack.

The need for digitalization will only intensify as energy demand increases, and the electric utility sector must work to keep up with the pace of a world that not only consumes more energy but also expects advanced technological operations and experiences. While embracing evolving technology may seem daunting, electric utility companies should focus on the long-term benefits for customers and employees. The positive outcomes will ultimately outweigh concerns, enabling electric utilities to meet and exceed these growing expectations.