Customer bills are climbing and numerous factors are contributing to this challenge. Overall demand is expected to surge 25% by 2030, increasing energy costs. Transmission and distribution systems need upgrades to transport larger volumes of energy. And, in some jurisdictions, legislative and regulatory policies are causing upward pressure on rates.Â
The question is how to protect affordability and ensure reliability all at once. Demand side management programs continue to be a valuable tool. To meet the moment, utilities can leverage four proven customer program design approaches.Â
Energy conservation still makes good sense.Â
Energy efficiency programs have been foundational in helping reduce system strain, maintaining affordability, and improving the lives of customers. In any situation where there is a shortage or scarcity, reducing waste is the typical first step. Energy efficiency programs have proven results and offer a framework for expanding offerings and extracting additional value   Â
Maximize value from existing programs. Â
Not all customers have equal impact on the grid. Demand management in areas with load congestion or capacity constraints provides the greatest value by reducing the need for new infrastructure investments. Program leaders can work with distribution system planners to identify these high-impact areas, then use customer segmentation and digital targeting to reach customers in strategic locations with tailored offers.Â
But what you measure matters. Distribution system planners won't rely on customer programs unless they have confidence in how those resources will perform. Traditional demand-side management (DSM) metrics like meter-based savings aren't sufficient for infrastructure planning. Pairing meter savings with data from grid-edge technologies and device-level telemetry like smart thermostats, EV chargers, or water heaters can improve confidence in DSM as a reliable grid resource by capturing real-time performance.
Scale up DER programs. Â
Distributed energy resources (DERs) can provide significant grid value and help keep energy affordable by supplying power during peak demand periods. Traditional programs like smart thermostats have strong potential to scale, while newer programs such as battery energy storage systems (BESS) and EVs represent large potential levers for grid impact.Â
To capitalize on DER opportunities, utilities must address several key considerations:Â
Clarifying ownership and control by defining whether DERs are utility-owned, customer-owned, or third-party owned, and outline how and when the utility can use them to determine optimal sourcing strategy. Â
Aligning incentives with true grid value while keeping them fair and customer-friendly, as misalignment can lead to program underperformance or customer dissatisfaction.Â
Building confidence in orchestration by establishing clear DER coordination and management approaches that minimize customer opt-outs and ensure the utility can rely on these resources during peak demand or system emergencies.Â
Get creative with financing. Â
Utilities can pair energy efficiency and load management with access to financial tools and innovative rate designs. One promising approach is DER leasing, where utilities lease expensive DERs to customers to manage upfront costs, then recoup expenses over time while providing grid value.Â
Maryland utility Green Mountain Power offered customers a 10-year BESS lease at $55 per month (under $7,000 total versus a $16,000+ system cost). The utility estimated nearly $3,000 net positive value per system above costs, reducing both grid costs and customer bills. The success was so compelling that regulators approved expanding from pilot to system-wide deployment.Â
Utilities can also layer state and local incentives with utility-funded programs to broaden participation and maximize affordability impacts.Â
Communicate proactively about affordability. Â
The factors driving customer bills, and the innovations that can help lower them, are complex and not always well understood. In many jurisdictions, utilities face restrictions on offering differentiated incentives due to concerns about discriminatory practices. However, regulators have been receptive when supported by evidence that all customers ultimately benefit. Three principles can help utilities engage stakeholders effectively:Â
Move beyond "resource savings" framing to quantify direct bill impacts. ICF used digital twins in Maryland to compare participants versus non-participants in efficiency programs, finding 18-32% winter heating savings for participants and demonstrating tangible affordability value.Â
Make affordability a co-equal outcome with reliability and decarbonization. Track and report energy burden metrics to show measurable household cost reductions.Â
Consider starting with pilots when pursuing regulatory approval for new programs. A pilot designed to offset a specific substation upgrade can be supported with clear data that builds trust with regulators.