Last week at DTECH 2026 (February 2-5), I had the privilege of moderating a panel on “Demystifying the Distribution System Operator (DSO).”
We were fortunate to have an outstanding group of global perspectives represented on stage:
- Jo-Jo Hubbard, Co-Founder and Chief Executive Officer, Electron
- Cheng Lin, Director of Engineering, Enova Power
- Alex Portilla, Director of Clean Energy Technology Platforms, Pacific Gas and Electric Company (PG&E)
The discussion was insightful, practical, and grounded in real-world experience across the United Kingdom, Canada, and the United States. While the term DSO may carry different meanings depending on the market, the objective is consistent: Optimizing the grid and available resources to deliver reliable service, maintain affordability, and unlock the full value of the grid for customers.
What DSO Is and What It Is Not
The term “DSO” has been around for years, but its meaning has shifted significantly over the past decade. Some view it as a new organizational function. Others see it as a market construct. In some regions, it represents a formal structural transition. In others, it reflects a gradual capability evolution.
When you strip away specific implementation details, the core objective remains the same:
- DSO represents a shift in how utilities plan and operate the distribution grid to optimally meet future grid needs and wholesale market needs.
- It reflects the need to better utilize grid assets, distributed energy resources (DERs), and demand flexibility.
- It acknowledges that traditional planning and infrastructure solutions alone may be too slow and too capital intensive to scale in the face of accelerating demand growth.
The concept behind the DSO is not simply a new organizational change, a single software platform, or a regulatory label. It describes a shift in the operating model that enables better coordination of grid assets, DERs, and load flexibility.
The Drivers for Change
The urgency behind DSO is rooted in fundamental changes happening across the grid.
Electricity demand is projected to grow more rapidly over the next 25 years than it has in recent history. Electrification, transportation growth, and large complex loads such as data centers are driving new pressures at the distribution level.
At the same time, DER penetration continues to increase. While this introduces operational complexity, it also creates new flexibility and value opportunities if properly integrated.
In Ontario, the Independent Electricity System Operator has projected that electricity demand could increase by roughly 75 percent by 2050 compared to today’s levels, reflecting electrification and industrial growth trends.
Source: IESO Annual Energy Demand Forecast, 2025 Annual Planning Outlook
At the same time, the North American Electric Reliability Corporation 2025 Long-Term Reliability Assessment highlights sustained peak demand growth over the next decade and increasing resource adequacy risks as traditional generation retires and renewable penetration increases.
Source: NERC 2025 Long-Term Reliability Assessment
Taken together, these trends signal that planning and operational practices must evolve. The conversation is no longer only about building more infrastructure. It is also about improving utilization of existing assets, integrating DERs more effectively, and leveraging flexibility as a system resource.
Panel Themes and Key Takeaways
Despite regional differences, the panel converged around several consistent themes.
1. DSO Is About Capability Evolution, Not Just Terminology
The most important takeaway is that DSO is not about renaming an organization. It represents a shift in planning and operational capabilities. Utilities are moving toward more dynamic coordination of load growth, DER integration, hosting capacity, and flexibility procurement.
It is an evolution in how the distribution grid is managed to serve both grid reliability and broader wholesale market needs.
2. Value and Affordability Must Remain Central
At the heart of this transition is customer value. Any move toward a DSO model must improve affordability, reliability, or speed to power. If the shift does not deliver measurable value, it will not sustain regulatory or stakeholder support.
The panel emphasized that flexibility must be evaluated not as a concept, but as a value proposition. Where does it defer capital? Where does it accelerate interconnection? Where does it enhance reliability? These are the questions that matter.
3. Evaluating the Full Stack of Value Is Essential
Understanding the full benefit of DSO capabilities requires looking across the full stack of value. DERs and flexibility can provide distribution-level benefits, wholesale market benefits, and customer-level benefits. Comparing those benefits against traditional infrastructure solutions is critical to properly evaluate benefits for customers.
The right answer is not always wires or non-wires. The right answer is often a portfolio approach informed by transparent evaluation of cost, timing, and risk.
4. Start Practical and Build Trust
Utilities do not need to transform overnight. Pilots, incremental capability development, and transparent performance measurement build confidence internally and externally.
Starting with focused use cases and scaling based on demonstrated success creates momentum while managing risk.
5. No Utility Is Alone on This Journey
Perhaps the most encouraging theme was the shared nature of the challenge. The panel reinforced that utilities across regions are at different stages, but they are grappling with similar issues which include demand growth, DER complexity, interconnection queues, and affordability pressures.
Collaboration and shared learning will be essential in shaping the future operating model of the distribution grid.
From Discussion to Action
The DSO conversation is no longer theoretical. Demand growth, interconnection queues, and resource adequacy risks are forcing real change. The question is not whether distribution planning and operations will evolve. The question is how deliberately and strategically that evolution happen.
Utilities have an important role to play, but they are not alone in shaping the path forward. As Jo-Jo Hubbard highlighted during the panel, regulatory alignment is equally critical. As industry advances DSO capabilities, it will be important for regulatory frameworks to focus on outcomes rather than prescribing a specific structure or model.
For those looking to go deeper, we recently published a white paper outlining a structured approach to advancing DSO capabilities, including evaluating value streams, sequencing capability development, and aligning planning and operations around measurable outcomes: “Unlocking Grid Capacity Through DSO Capabilities.”
Looking Ahead
The DSO conversation is ultimately about how we make better use of the grid we already have while preparing for the grid we know is coming. It is about evolving planning and operations to manage growth, complexity, and resource diversity in a cost-effective and reliable manner. The opportunity now is to move from discussion to disciplined implementation.
The grid is evolving quickly. Optimizing how we use it is one of the most important challenges in front of our industry.
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