Artificial Intelligence in Energy Utility Regulation

Artificial intelligence (AI) is sweeping the nation. It’s so popular these days that with the advent of apps like ChatGPT, I’d venture to guess a fair number of you reading this have even tried it! With AI at the forefront of everyone’s minds, it’s important for those of us in the regulated energy field to start thinking about - and talking about - its applications in our industry. 

Following the NARUC Summer Policy Summit in Austin earlier this month, we hosted a happy hour with former Federal Energy Regulatory Commission (FERC) Chairman Neil Chatterjee. For those who didn’t get the chance to attend, I thought I’d share some of the key takeaways. 

HData’s Regulatory AI Reception at the NARUC Summer Policy Summit in Austin, July 16-19, 2023. From left to right: Erin Riley (HData),  Ronan Gulstone (FERC), Richard Grinschgl & Luke Ashton (HData), Neil Chatterjee (formerly FERC), Willie Phillips (FERC), Jeff Press & Kai Jean-Simon (HData)

Perhaps the biggest takeaway of all so far is that artificial intelligence will play a vital role in the way we conduct business. That’ll be true for every industry, but the opportunity in ours is especially great. The data in regulatory filings has immense value. And not just those reported to the FERC, but in data reported to State PSCs and beyond as well. The fillings contain incredible insights that enable utilities providers to optimize operations within plants, benchmark performance across the industry, calculate or substantiate claims for base rates, and more. Investors can use this data to plan financial strategies, regulatory bodies use it in their everyday operations, and even legal teams can use it as they prepare for base rate proceedings. The applications are broad. But have you ever tried to actually get information out of these regulatory documents? The largest regulatory documents contain over 25,000 facts in a single file! It is impossible to do a substantive review of these forms manually. That’s where AI comes in. 

Applying AI - with tools designed for and trained up specifically for our industry - means analyzing a state docket or FERC filing takes just seconds, not days. And not a single copy + paste command needs to be used. If someone wanted to know, for example, “does this document mention any rate cases?” They can just ask AI. They can even ask AI to summarize each case in 5 bullet points. You can ask AI to “give a short description of the companies that entered information on infrastructure replacement programs and the amount of money under those programs" and it will. Commands just like these are going to be commonplace in the everyday work here in the utilities industry. Regulator, regulatee, and professions aligned with them on all sides. And it’s for this very reason that our industry needs to be thinking about how AI and large language models are going to impact our work. 

When it comes to AI implementation within industries that use regulatory data, data validity and auditability are going to be at the center of the conversation. Artificial intelligence is only as good as the data set it was trained on. That's why, for our purposes, it's critical to use AI that has not only been specifically trained on regulatory data, but is also able to generate source documentation for quality assurance. Finding a partner that can work with your organization on deploying fact-based AI over generative AI is going to be paramount. 

HData is already leading the charge as the first company to launch an AI solution that is purpose-built to automate regulatory research and analysis. And, our work there is expanding. In early June, we announced a partnership with Southern Company to pilot Regulatory AI. This is the first chance our industry has to ride the wave of AI-driven transformation and modernization. 

The exciting part is that efficiency and efficacy of operations is just the beginning. There are so many insights to be gleaned from this information that will improve collective work on everything from O&M analysis to transmission line comparison, to rate analysis, to reliability and generation.

We’re excited about the impact AI will have on our industry and  look forward to working to help both utilities and regulators research smarter, not harder.

Are you interested in learning more about artificial intelligence in the utilities sector? Curious to see first-hand what HData products can do? Request a demo and a member of the team will reach out.