Tamara Grose is vice president of client success at VertexOne.
The U.S. power sector is undergoing a quiet revolution — one that promises to reshape not only generation and transmission, but the very role of retail energy providers, or REPs, and their relationships with end customers.
The last decade was characterized by incremental shifts in competition and procurement strategies. The current decade, by contrast, is being shaped by a fundamental reordering: a cleaner, more distributed generation stack; rising demand driven by electrification and digital infrastructure; and customers who increasingly expect their energy provider to align with their values.
As these trends converge, REPs face a dual challenge. First, they must design and manage a “next-generation supply portfolio” capable of balancing intermittency, price volatility and regulatory shifts. Second, they must ensure that the portfolio they construct resonates with, and is trusted by, their customer base. Making this “next-gen mix” not purely technical, but rather, a strategic integration of supply optimization and customer alignment.
Structural shifts in the US power market
One of the most consequential stories of the last year is clean energy’s rise, and the benchmark it represents for retail providers.
In its US Electricity 2025 Special Report, energy think tank Ember confirmed the country’s electricity sector is at an inflection point as wind and solar have overtaken coal in the national generation mix, with fossil fuels now accounting for less than half of the country’s power mix for the first time on record, signaling a systemic shift is underway.
The Business Council for Sustainable Energy 2025 Key Trends Report echoes Ember’s finding, noting that renewables — particularly wind, solar and storage — have comprised a record share of new build capacity additions over the last year.
This, as overall electricity demand has ballooned to one of the sharpest surges this century. The growing demand driven by data centers, electrification (EVs, heat pumps), new industrial loads and increased digital consumption, marking a dramatic departure from the flat demand that defined much of the 2010s.
The confluence of these trends carries significant implications for retail energy providers in deregulated markets, fundamentally shifting the supply side and reshaping the way electric energy retailers think about procurement and risk.
A framework published in the energy and engineering scientific research journal, Energies, describes this “next-generation retail electricity market” as one that will be increasingly shaped by decentralization, digitization and decarbonization. The paper’s authors make the case that distributed energy resources, advanced metering and smart grid technologies will soon blur the boundary between wholesale and retail, requiring REPs to evolve from a commodity model into a services and market orchestration one.
Supply portfolios in transition
By aligning their supply portfolios with the clean energy transition and customer preferences, retail energy providers can position themselves as leaders in the next-generation energy mix, driving customer satisfaction and long-term growth. These structural changes, however, place new demands on supply portfolio management.
Ember’s US Electricity 2025 Special Report highlights how solar and storage now dominate new additions, but their variability means portfolios built solely on renewable contracts risk exposure to imbalance charges and real-time market volatility. Market intelligence and analytics solutions provider for the power industry, Ascend Analytics, reinforces this view, adding that rising demand and congestion in key markets (e.g., ERCOT, PJM) amplify this risk.
The implication is that REPs must adopt a more diversified approach with a resilient portfolio that integrates the following:
- Diversification of energy sources, including traditional generation and renewables.
- Renewable power purchasing agreements and green products to meet consumer demand for clean energy and sustainability.
- Dispatchable resources to hedge and protect against volatility.
- Storage and demand response capacity to monetize flexibility.
This mirrors Enode’s prediction that flexibility will become a core value stream for electric energy retailers. Where historically flexibility was a system operator concern, today it’s evolved into a business model opportunity for REPs who can aggregate and monetize DERs, design dynamic pricing and deploy storage assets.
Essentially, by aligning their supply portfolios with the clean energy transition and customer preferences, retail energy providers can position themselves as leaders in the next-generation energy mix, driving customer satisfaction and long-term growth.
Customer expectations, trust and generational dynamics
But all the supply-side sophistication in the world counts for little if a retailer can’t win and retain customers. And consumer behavior in energy markets is evolving, with an increasing demand for transparency from providers about the source of their power, the carbon footprint of their usage, and the options available to them for aligning their consumption with their values
So while supply portfolios are becoming more complex, the rising demand for personalization, trust, flexibility and digital-first experiences are what will win share in the retail market as customer-centricity is set to define the next stage of retail competition.
Beyond that, generational value differences are emerging: whether it’s Boomers prioritizing reliability and simplicity, or Gen-Z demanding climate-aligned energy, providers must calibrate offerings to diverse segments.
For REPs, this means that designing the right supply mix is inseparable from how that mix is communicated. The same diversified portfolio that manages risk on the supply side must also be translated into products and messages that resonate with diverse customer groups.
Taken together, these sources point to a clear conclusion: the next-generation retail energy mix is as much about alignment as it is about diversification. On the supply side, portfolios must balance renewables, storage, demand response and risk management tools to ensure reliability and cost stability. On the customer side, REPs must engage segments with transparency, personalization and value-based offerings.
The Energies scientific journal article, The Next-Generation Retail Electricity Market in the Context of Distributed Energy Resources: Vision and Integrating Framework, is a reminder that the electric retail energy market of the future is not just a conduit between wholesale and end-use, but rather a dynamic platform that integrates grid-edge resources, mediates between central markets and local needs and provides differentiated value to customers. In this sense, the supply portfolio and the customer audience are two sides of the same strategic coin.
Implications for retail energy providers
The path forward for REPs in deregulated markets is not optional, it’s a strategic necessity. The combined lessons of the above cited research and analyses suggest it’s imperative for REPs to adopt the following now:
- Build flexibility into supply portfolio (physical and contractual). Demand response, storage and DER aggregation should be treated as core supply resources, not ancillary services.
- Segment offerings by customer values. Develop differentiated products for diverse customer groups that map to generational and demographic preferences.
- Treat supply and customer engagement as integrated strategy, not separate silos. Prioritize transparency and communicate the composition and rationale of the supply mix to build trust and loyalty.
- Engage in regulatory and market design conversations. The shape of compensation and market access for DERs will determine the competitive landscape.
- Invest in digital infrastructure. Smart platforms and analytics are critical for optimizing both supply-side decisions and customer engagement.
The energy transition is no longer a distant prospect, it’s here. Renewable penetration, demand growth, DER integration and evolving customer expectations are converging to redefine deregulated retail energy markets. The “Next-Generation Mix” is not a simple procurement formula, but a framework for uniting supply strategy with audience expectations.
For REPs, the opportunity — and the challenge — is to move beyond managing kilowatt-hours and toward orchestrating portfolios that reflect both the realities of modern supply and the values of modern customers. Those who succeed will not only weather the volatility of today’s markets but will also position themselves as trusted partners in the energy systems of tomorrow.
