Tackling Rising Electric Bills: Strategies for Utilities

Understanding the Impact of Rising Electricity Prices

In 2025, we are continuing to see electricity prices rising above core inflation (the 2025 average price per kWh is 21% above 2021 levels). In 2024, the average monthly residential electric bill reached a staggering $182 nationally, marking the highest amount ever recorded by J.D. Power. Prices are forecast to continue climbing through 2026. What does this mean for the consumer?

This sharp increase in electric bills has left many customers disgruntled and financially strained. According to the J.D. Power 2024 U.S. Electric Utility Residential Customer Satisfaction Study, overall satisfaction has declined for the fourth consecutive year, dropping to 707 on a 1,000-point scale. The most significant declines were observed in billing and payment, and customer care, both down by 11 points. In 2025, we see bill amounts continuing to increase, up to $186 in 2025 Q2 (compared to $169 in 2024 Q2).

In 2024, 39% of study respondents indicated they are “worse off financially this year” compared to the previous year. More than half (53%) of study respondents surveyed in 2025 report being “about the same [financially] compared to one year ago.” With electric utility costs continuing to rise, it is crucial for utilities to understand the impact these increases have on their customers. Higher bills can lead to customer frustration, decreased satisfaction, and a growing demand for transparency and support from utility companies.

The Importance of Proactive Communication

Proactive communication is essential for mitigating the adverse effects of rising electric bills. When customers are informed about the reasons behind rate increases and the steps utilities are taking to manage costs, they are more likely to feel understood and valued. J.D. Power Utilities Intelligence data emphasizes the importance of proactive communication, suggesting that utilities should send outage text alerts, email infrastructure updates, and provide tips on how to save energy.

By keeping customers in the loop, utilities can demonstrate their commitment to customer care while building trust. This approach not only helps ease the frustration associated with higher bills but also shows customers that their money is being used for more than just covering usage costs.

Keeping Customers Informed About Rate Changes

Informing customers about rate changes might seem counterintuitive, but transparency in this area is crucial for maintaining trust and satisfaction. Customers appreciate being kept in the know, especially when it comes to their finances. Utilities should communicate rate changes clearly and promptly, explaining the reasons behind the adjustments and how they will impact the customers' bills.

Providing detailed information on how rate changes are calculated and what factors contribute to these changes can help demystify the process for customers. This transparency can alleviate concerns and reduce the likelihood of dissatisfaction.

Utilizing Outage Text Alerts and Infrastructure Updates

Infrastructure updates and outage text alerts are vital tactics for keeping customers informed and engaged. When outages occur, customers want to know what is happening and when they can expect their service to be restored. Sending timely text alerts can prevent frustration, reduce call volumes, and ensure customers feel supported.

Additionally, regular updates on infrastructure improvements can show customers that their money is being invested in enhancing the reliability and efficiency of their local electric grid. Highlighting these improvements can help justify rate increases and demonstrate the long-term benefits of these investments.

Promoting Energy Conservation Tips to Customers

One of the most effective ways utilities can help customers manage rising electric bills is by promoting energy conservation. Educating customers on how to reduce their energy consumption can lead to significant savings on their bills. Utilities can offer tips on simple changes, such as using energy-efficient appliances, adjusting thermostat settings, and unplugging devices when not in use.

Providing customers with personalized energy reports that show their usage patterns and suggest specific actions they can take to conserve energy can also be beneficial. By empowering customers to take control of their energy consumption, utilities can help them save money and reduce their environmental impact.

Offering Flexible Billing and Payment Options

With a significant portion of customers reporting financial strain, offering flexible billing and payment options can be a lifeline. Utilities can provide options such as budget billing, which spreads the cost of energy evenly throughout the year, or payment plans that allow customers to pay their bills in installments.

Flexibility in payment options can help customers manage their finances more effectively and prevent them from falling behind on their bills. By accommodating customers' financial needs, utilities can improve satisfaction and foster long-term advocacy.

Putting it Together for Utilities

Rising residential electric bills pose a significant challenge for both customers and utilities. However, by adopting proactive communication strategies, promoting energy conservation, offering flexible billing options, and highlighting infrastructure investments, utilities can help mitigate the negative impact of higher costs. These efforts can lead to improved customer satisfaction, stronger trust, and a more positive perception of the utility company.

Study subscribers have access to exclusive best practice content that can help utilities navigate the challenges of rising electric bills. Reach out to your J.D. Power representative to learn more >>