AI Drives North American Utility Modernization Amid Decarbonization and Reliability Challenges
Power and utilities companies across North America are accelerating their modernization efforts by adopting AI-driven and data-centric technologies to meet decarbonization targets, enhance grid reliability, and improve customer experiences. According to the 2025 ISG Provider Lens® Power and Utilities Industry — Services and Solutions report, these organizations are transitioning from reactive to predictive and proactive operational models in response to rising complexity from distributed energy resources (DERs), electric vehicle adoption, and evolving customer expectations. Utilities face mounting pressure to balance ambitious climate goals with the need to maintain affordable and reliable energy delivery. AI, machine learning, and generative AI are now central to their strategies, enabling improvements in outage prediction, storm forecasting, predictive maintenance, and field workforce optimization. These advancements help reduce manual workloads and lower operating costs while improving service continuity. Digital innovation is also helping utilities extend the lifespan of aging infrastructure. By leveraging advanced analytics, companies can detect early signs of equipment failure, leading to faster repairs, shorter restoration times, and better compliance with service-level agreements. Grid-edge intelligence has emerged as a key focus area, with utilities deploying DER management systems (DERMS), advanced distribution management platforms, and virtual power plants to handle bidirectional energy flows. These tools allow utilities to increase network capacity and resilience using existing infrastructure, reducing the need for costly capital upgrades. Customer engagement is also undergoing a digital transformation. Utilities are upgrading customer information systems to support time-based pricing, flexible payment options, and personalized energy insights. AI-powered contact centers, conversational self-service tools, and automated quality management systems are improving first-contact resolution rates and reducing service costs. These technologies also enable more empathetic and efficient interactions during high-stress events such as outages or billing disputes. The report highlights that utilities achieving the best results are those integrating asset, grid, and customer modernization around shared data platforms. This unified approach enables simultaneous progress on reliability, affordability, and customer trust. Additional trends include increased investment in cybersecurity and compliance technologies, as well as the use of digital twins and IoT data for long-term infrastructure planning and decision-making. The report evaluates 35 service providers across four quadrants: Enterprise Asset Management, Process and Customer Experience Management, Smart Metering and Grid Modernization, and Technology, Transformation and Consulting. Accenture, Capgemini, Cognizant, Deloitte, HCLTech, IBM, Infosys, TCS, and Wipro are named Leaders in all four quadrants. Hitachi Digital Services and PwC lead in three each, while Tech Mahindra is recognized as a Leader in two. CGI, Concentrix, Cyient, EY, and LTIMindtree are Leaders in one quadrant. Kyndryl, Sutherland, and Tech Mahindra are identified as Rising Stars—companies with strong potential and promising portfolios. Capgemini has been named the 2025 Global ISG CX Star Performer in the power and utilities sector, based on the highest customer satisfaction scores in ISG’s Voice of the Customer survey. The full report is available to subscribers or for purchase on the ISG website. ISG Provider Lens® research combines data-driven analysis with real-world insights from ISG’s global advisory team, supporting enterprise decision-making and strategic sourcing. ISG, founded in 2006, serves over 900 clients, including 75 of the world’s top 100 enterprises, and is a leader in leveraging AI to drive operational excellence and growth.
