Like many other necessities, electricity in the United States has also been increasingly priced. The average monthly bill for residential electricity use was about $182 in 2024, which is an increase of 8 percent over the past two years. While there is no shortage of valid reasons for such a rise in inflation, extreme weather conditions, and infrastructure upgrades, consumers are more dissatisfied with other utilities.

According to J.D. Power’s 2024 US Electric Utility Residential Customer Satisfaction Study report, the customer satisfaction level with electric utilities has decreased for the fourth year. Dissatisfaction is especially pronounced in regulated markets, where customers feel deprived of choice and tend to expect more from energy service providers.

Broken Connection Between Price and Perceived Value

The main factor in assessing customer satisfaction is the customer’s perception of value. Customers evaluate the worth of a service by weighing its benefits against the costs involved. In the case of energy, this equation is further enriched by perceptions of reliability, customer service, and price fairness.

However, as energy costs rise, customers struggle to reconcile increased bills with what they perceive as unchanged service levels. Unlike industries where consumers can easily switch providers, many utilities operate within regulated environments, leaving customers feeling captive and amplifying dissatisfaction. Even as utilities invest in system hardening, new technologies, and reliability improvements, these efforts often go unnoticed, exacerbating frustration. 

Why Value Matters for Utilities

Customer satisfaction enhancement is an act of goodwill and offers financial and regulatory advantages. The research done by PwC demonstrates that customer satisfaction directly impacts regulatory decisions during rate increase requests by utilities. When levels of customer satisfaction are high, the utility entry into any new unregulated services and products will be much smoother, enabling them to offer far more value as new options without resistance.

For utilities operating in highly regulated markets, prioritizing customer experience helps build long-term goodwill. Strengthening trust and transparency can provide a competitive edge, even in markets where customers have limited provider options.

Aligning Price with Perceived Value

Organizations should consciously align their pricing with customers’ perceived value. The PwC study shows that personalized, data-driven experiences require the development of a 360-degree view of customers. By leveraging advanced analytics, utilities can anticipate customer needs, tailor communication, and enhance satisfaction. 

Four Key Priorities for Utilities

Utility companies should focus on critical areas, such as customer organizational and behavioral changes, to create a customer-centric culture and enhance customer experience. Budgeting to enhance the customer experience is also crucial for long-term improvements and commitment. State-of-the-art technologies and tools, such as AI-based chatbots, real-time energy-use trackers, and mobile interfaces, are essential for monitoring customer behavior.

Lessons From DHL Express’ GoGreen Plus Program

Customer-centric strategies from other industries can inspire utilities. For example, DHL Express initiated GoGreen Plus to align with the demand for sustainability from small and medium-scale businesses (SMBs). Clients could reduce their carbon footprint through Sustainable Aviation Fuel (SAF), which brings the value of their services into line with their values. By allowing customers to customize their level of sustainability investment, DHL successfully enhanced perceived value and strengthened customer trust. 

The Path Forward

With electricity prices ever-rising, utilities need to align pricing with perceived value if they wish to retain customer satisfaction. Open communication, proactive engagement, and investing in customer-centric technologies can alleviate dissatisfaction and build extended trust. 

The future of the energy sector will be defined by its ability to respond to customer expectations. By embracing innovation and prioritizing satisfaction, utilities can navigate industry challenges while promoting stronger relationships with their consumers.