Regulatory trends shaping utility customer programs in 2026
As utilities move into 2026, regulatory activity across the U.S. points to a clear shift in regulatory expectations, focused less on the number of customer programs and more on what those programs are expected to deliver.
While customer programs remain a core part of utility portfolios, many commissions are placing greater emphasis on how those programs align with grid reliability, affordability goals, and long-term planning objectives. For customer program leaders, this shifts how programs are designed, justified, and evaluated.
From DER growth to DER coordination
Regulators are no longer satisfied with simply encouraging distributed energy resources. The emphasis has moved to coordination—how DERs interact with the grid and deliver system value.
Recent actions across states signal growing expectations around virtual power plants, device-level visibility, geotargeted demand response, and understanding the locational value of energy efficiency. For customer programs, this means incentives and enrollment strategies increasingly need to align with operational needs, not just adoption targets.
Programs that cannot demonstrate grid relevance may face sharper questions, even if participation remains strong.
Resiliency in the regulatory spotlight
For customer program leaders, the takeaway is clear: while resilience requirements currently target infrastructure, programs that align with resilience goals can strengthen regulatory filings and demonstrate added system value.
Regulatory activity across multiple states has placed increased emphasis on extreme-weather resilience within utility planning. Commissions require utilities to quantify risk, propose mitigation strategies, and benchmark investments in storm hardening, wildfire mitigation, and grid reliability. Examples include new wildfire mitigation plan requirements in Oregon and Washington, targeted storm-hardening infrastructure approvals in Massachusetts, and extraordinary event bonds for extreme weather in Minnesota.
These actions are primarily focused on utility planning and infrastructure rather than directly mandating customer programs. However, the broader regulatory context elevates the relevance of customer programs that can support resiliency outcomes. Programs that enable load flexibility, distributed storage, or DER coordination may be viewed as complementary to resilience and reliability objectives.
Designing programs with measurable contributions to reliability, flexibility, and risk mitigation positions utilities to respond more effectively to both planning directives and evolving regulatory expectations.
Improving affordability
State regulators and legislatures continue to advance affordability objectives, even as federal support for low-income energy programs fluctuates. With energy prices rising, commissions and lawmakers have a renewed focus on specific, measurable outcomes.
Recent examples include:
- California: Residential electrification rebates targeted to income-qualified property owners.
- Connecticut: Legislation that limits EV incentives to low-to-moderate income households, reviews shutoff standards for medically vulnerable customers, and prioritizes participation of disadvantaged communities in clean energy programs.
- Michigan: Expanded and streamlined eligibility for energy assistance programs.
- Minnesota and Oregon: Funding for weatherization and electrification programs targeted to underserved populations.
Across these cases, regulators are emphasizing tailored program design, refined eligibility criteria, and performance metrics that demonstrate how programs reach specific populations. Programs that track participation among low-income or vulnerable customers not only improve affordability for those who need it most, but can also help manage demand by encouraging participation in energy-saving initiatives.
Electrification programs get more surgical
Building and industrial electrification remains a regulatory priority, but commissions are signaling a preference for targeted approaches and a thoughtful transition over ambitious, mass-market expansion.
State efforts increasingly emphasize heat pump rates and electrification affordability, hybrid systems, pilots tied to specific customer segments, and electrification that aligns with grid readiness. The message is clear: electrification is still in play, but it must be cost-effective, grid-aware, and defensible.
Customer electrification programs that integrate energy efficiency upgrades, load management, and rate design will be better positioned than standalone incentive offerings.
Gas transition planning creates program uncertainty—and opportunity
Debate over the future of gas utilities is accelerating, with new planning requirements, climate compliance filings, and pilot proposals emerging across states.
For customer program teams, this introduces ambiguity but also room to shape solutions. Programs that help manage declining demand, test hybrid approaches, or support orderly transitions can play a constructive role in long-term planning conversations.
Regulators appear open to experimentation, provided utilities can explain the customer and system value.
Large loads reshape priorities
Data centers and other large loads are driving regulatory attention to forecasting, rate design, and infrastructure planning. While these customers usually sit outside traditional DSM portfolios, their impact ripples into customer programs through capacity constraints and resource adequacy concerns.
Regulators are signaling greater interest in programs that can deliver flexible load, fast response, and locational value—attributes that customer programs are well positioned to provide.
What this means for customer program leaders
Taken together, these trends point to a quiet but meaningful shift. In 2026, customer programs will increasingly be judged on three things:
- How well they integrate with grid and planning needs.
- Specific benefits they bring to customers and regulators beyond traditional energy savings.
- Whether their value proposition is resilient to evolving policy and market developments, such as fuel transitions and large loads.
The most successful program designs will be highly intentional—designed at the intersection of customer behavior, system needs, and regulatory expectations.