LET'S CONNECT

Signals Received: What We’ve Heard from the Industry in the Past Year

February 2026
  • It’s been a big year for utilities. Gone are the days of quiet, slow-moving decisions. The industry is buzzing with change and facing new possibilities and challenges at every turn.

  • How do we keep up? By diving into conferences and trade shows, we get the inside scoop on which technologies are picking up steam, what ideas are moving from experiment to reality, and what is keeping everyone up at night. No matter the event, we keep hearing the same signals: priorities are shifting fast and readiness is just as important as the technology itself.

Virtual Power Plants Move from Concept to Capability

VPP is no longer a future concept to be pursued. It now has specific definitions within the industry and utilities are moving quickly to capture the value that distributed assets can deliver. One executive summed it up well,
  • “The thing I love about VPP is that I don’t have to build transmission, get any permits, or make huge long-term investments. It’s ready for us now.”
In the VPP world, two primary models have emerged – a centralized grid DERMS connected to a central control system such as an Advanced Distribution Management System, and a Grid-Edge DERMS that controls behind-the-meter resources, either individually or in aggregate. Centralized DERMS are typically used to manage utility-owned DER, or resources owned by customers under arrangements like power purchase agreements that allow shared control. In contrast, Grid-Edge DERMS most commonly support Demand Response events, though more advanced use cases are emerging quickly, including distribution-level grid support and managed charging of batteries and EVs. Despite the promise of VPP, many utilities lack a cohesive strategy. Some early innovators are now working to rationalize multiple investments into a unified operating model, while others are just beginning their VPP journey.
The Takeaway
Get a VPP Strategy
As VPP becomes more clearly defined and more products carry the DERMS label, senior leaders are increasingly pushing their organizations to implement a VPP. What is often missing from the conversation is a simple truth: a VPP is a capability, not a single technology. Each utility operates a unique grid made up of diverse assets, overseen by regulators with distinct expectations, and serving customers with varying levels of interest in participating in grid operations. The highest priority investment right now should be the development of a VPP strategy tailored to your utility and your customers. A strong strategy evaluates existing programs and identifies DER use cases that align with the specific needs of the grid. When that strategy is clear, technology decisions, workforce development, and policy alignment follow. Cross-functional teams understand the value being pursued, how their roles contribute, and what operational changes are required to deliver results. This is especially important for small and medium-sized utilities facing rapid load growth from electrification and rural data center expansion. With a smaller customer and asset base, the margin for error is thinner. Strategic planning today reduces the need for reactive decisions tomorrow.

AI is Past the Curiosity Stage, but Not Yet Normalized

AI has the potential to be transformative across grid planning and scenario analysis, grid sensing and situational awareness, and asset performance modeling and predictive insights. Like nearly every industry, utilities are also exploring how large language models can support employees in back-office roles, including customer service, employee assistance tools, regulatory filings, and other document-intensive work. At the same time, AI is in a storming phase. Experimentation is accelerating, but governance is inconsistent, and foundational capabilities such as data governance are often lagging. As we have written previously, unreliable data and weak governance contribute to hallucinations, inconsistent results, and insights that create more investigative work than value. Paradoxically, AI itself may help power the tools that cleanse and prepare data for production use. Addressing the five pillars of AI in regulated, mission-critical environments is more important than ever. Getting ahead of these issues can accelerate both adoption and value realization. Utilities should create clarity around where AI informs decision-making, how models are governed and trusted, and how insights translate into measurable outcomes. These imperatives also point to the need for focused employee development. Building AI competence through dedicated training enables employees to turn new skills into practical techniques that improve performance. Those who embrace and master AI can become internal resources for their teams. Incentive programs that reward meaningful AI-driven innovation reinforce what the organization values: impact, not experimentation. Unfortunately, many utilities remain stuck in an AI “what if” pilot cycle. Without clearly defined business outcomes, projects drift and value is delayed or lost. Whether leveraging vendor tools or developing internal capabilities, AI is ready to move beyond experimentation and deliver measurable, meaningful results.
The Takeaway
Align AI to Business Performance
Kelly Saye, CEO of Sea Change Advisors, puts it clearly: “We cannot modernize the grid without AI. It is not a ‘nice to have.’ It is a non-negotiable. The organizations that embrace it will accelerate, and the ones who don’t will lag behind.” Taking that a step further, leadership in this space will not come from adoption alone. It will come from using AI to achieve tangible, measurable outcomes. Like any tool, AI enables results. It is not a result in itself. Here’s how to get the most out of your AI efforts:
  • Establish an AI policy. If you have not done this yet, you are already behind. Your employees are using AI, and likely so are you. Clear guidance on acceptable use, data security, and risk boundaries protects the organization while enabling responsible innovation.
  • Create secure environments for experimentation. Provide data-secure AI environments where employees can explore and innovate safely. Many enterprise cloud and productivity platforms already offer tools that allow you to embrace AI without compromising security.
  • Align leadership and identify champions. Secure alignment from the C-suite down and identify credible champions within the organization. The ideal champion understands the business, brings creativity and drive, and can translate potential into practical value. For emerging leaders and key employees, this is a significant career opportunity.
  • Accelerate learning through partnerships. Stay informed about vendors and start-ups tackling complex utility challenges. Strategic partnerships can shorten the learning curve, spark new ideas, and help your organization move faster toward meaningful outcomes.

Technology is an Enterprise Priority

Managing competing priorities is not a new challenge for technology professionals. What has changed is the urgency. As utilities rely more heavily on automation and data-driven insights, disciplined governance matters more than ever. This year, we heard strong examples of organizations adapting proven governance approaches to secure executive backing for technology initiatives. These efforts also build support among the employees and operators responsible for execution, ensuring that technology initiatives align with the utility’s broader strategy. One example came from a smaller municipal utility that established a technology steering committee composed of key leaders, including the CFO, COO, and CIO. The committee reviews proposed implementations, prioritizes initiatives, and thoughtfully paces them across the organization. They recognized that many technology projects are not purely financial decisions. They are strategic investments tied to overall business planning that should deliver value across multiple departments. The steering committee also helps initiative leaders clearly articulate the benefits of their projects in plain language that board members can understand. These concise, compelling narratives prepare decision-makers for future investments guided by a technology roadmap that sequences projects based on enterprise value and the organization’s capacity for change. Setting this foundation builds credibility and strengthens the organization’s ability to execute with confidence.
The Takeaway
Treat Technology as a Core Enterprise Asset
Here's how:
  • Establish an AI policy. If you have not done this yet, you are already behind. Your employees are using AI, and likely so are you. Clear guidance on acceptable use, data security, and risk boundaries protects the organization while enabling responsible innovation.
  • Create secure environments for experimentation. Provide data-secure AI environments where employees can explore and innovate safely. Many enterprise cloud and productivity platforms already offer tools that allow you to embrace AI without compromising security.
  • Align leadership and identify champions. Secure alignment from the C-suite down and identify credible champions within the organization. The ideal champion understands the business, brings creativity and drive, and can translate potential into practical value. For emerging leaders and key employees, this is a significant career opportunity.
  • Accelerate learning through partnerships. Stay informed about vendors and start-ups tackling complex utility challenges. Strategic partnerships can shorten the learning curve, spark new ideas, and help your organization move faster toward meaningful outcomes.
The most effective way to achieve this level of clarity is to invest in your leaders. Equip them to share a clear vision and translate the impact of technology changes into terms their teams understand and embrace.

From Signal to Strategy

Across every event, executive panel, and hallway conversation, the pattern is clear. Utilities are operating in an environment defined by rapid expansion of technological capability and choice. What they need is clarity. Clarity about what a VPP means for your specific grid. Clarity about where AI drives measurable value versus experimentation. Clarity about how technology investments align to enterprise strategy.In each case, the conversation is shifting from innovation to execution. VPP is moving from concept to operational capability. AI is moving from curiosity to performance expectation. Technology governance is moving from back-office coordination to board-level priority. The common denominator is organizational readiness. The utilities that will lead in the next five years are not necessarily the ones that pilot the most tools. They are the ones that:
  • Define strategy before deploying technology
  • Tie innovation to measurable business outcomes
  • Govern technology as a core enterprise asset
  • Invest in leadership alignment and communication
Load growth, electrification, distributed resources, regulatory complexity, customer expectations, and pressure to maintain affordability for customers are all increasing together. In that environment, intentional strategy creates compound value. The question for every utility leader is straightforward: Are we building the structure, discipline, and alignment required to turn today’s capabilities into tomorrow’s performance? The utilities that act with focus and discipline now will shape their cost structure, performance, and customer trust for years to come.