Key Takeaways
- The New York State Public Service Commission (PSC) has launched a formal inquiry into how utilities, including National Grid, are deploying artificial intelligence (AI) across their operations.
- Utilities must disclose every AI system they use, along with the policies, procedures, and protocols governing that technology, within a 60‑day window.
- The PSC cites a range of risks associated with AI—hallucinations, algorithmic bias, lack of transparency, data‑privacy concerns, misconfiguration errors, cybersecurity threats, and functional brittleness—that could jeopardize service reliability and consumer protection.
- Current AI applications in the utility sector focus on customer‑service chatbots, predictive maintenance of infrastructure, and automated facility‑safety inspections.
- The information gathered will inform the PSC’s decision on whether additional safeguards, standards, or regulatory policies are needed to mitigate AI‑related risks while preserving innovation benefits.
PSC Orders Utility AI Disclosure Amid Growing Concerns
On Thursday, the New York State Public Service Commission (PSC) announced an inquiry that compels the state’s electric and gas utilities to reveal every instance of artificial intelligence they employ in day‑to‑day operations. The directive, issued to companies such as National Grid, Consolidated Edison, and others, gives utilities a 60‑day deadline to submit a comprehensive inventory of AI tools, detailing their specific functions, the data they ingest, and the outcomes they produce. “According to the commission, utilities are now relying on AI systems to perform basic functions, such as customer service, predictive maintenance, and facility safety inspections,” the PSC stated in its press release. The move reflects a broader trend in which regulators nationwide are scrambling to keep pace with the rapid adoption of AI in critical infrastructure sectors.
Why the PSC Is Focused on AI Risks
The commission’s order is not merely an accounting exercise; it is rooted in a documented set of hazards that AI can introduce when deployed without sufficient oversight. In its announcement, the PSC warned that “AI systems create risks for organizations and are susceptible to hallucinations, algorithmic biases, transparency issues, data privacy concerns, misconfiguration errors, cybersecurity attacks, and functional brittleness.” Each of these risk factors carries tangible implications for utility operations: hallucinations could lead to faulty outage predictions, biased algorithms might disproportionately affect certain customer demographics, and opaque decision‑making processes hinder accountability when service disruptions occur. By forcing utilities to lay bare their AI practices, the PSC aims to identify where these vulnerabilities may already be manifesting and to gauge the adequacy of existing internal controls.
Current AI Use Cases in New York’s Utilities
While the inquiry is forward‑looking, the PSC’s documentation already highlights three primary areas where utilities have integrated AI. First, many companies have deployed natural‑language‑processing chatbots to handle routine customer inquiries—billing questions, service‑outage reports, and appointment scheduling—thereby reducing call‑center volumes. Second, predictive maintenance algorithms analyze sensor data from transformers, substations, and underground cables to forecast equipment failures before they cause outages, potentially saving millions in emergency repairs. Third, computer‑vision systems are being used for facility‑safety inspections, scanning images from drones or fixed cameras to detect corrosion, vegetation encroachment, or structural anomalies that human inspectors might miss. “Utilities are now relying on AI systems to perform basic functions, such as customer service, predictive maintenance, and facility safety inspections,” the commission reiterated, underscoring how deeply AI has become embedded in operational workflows.
What Utilities Must Disclose
The PSC’s order specifies a detailed reporting framework. Utilities must list each AI system, including its vendor, version, and the business unit that oversees it. They are also required to describe the data sources feeding the model—whether smart‑meter readings, weather feeds, or customer‑interaction logs—and to explain the model’s purpose, expected outputs, and any human‑in‑the‑loop safeguards. Crucially, firms must submit their governing policies: internal AI ethics guidelines, risk‑assessment procedures, model‑validation protocols, incident‑response plans, and data‑governance measures. This level of granularity is intended to give regulators a clear view of not just what AI is being used for, but how it is managed, monitored, and mitigated against failure modes.
Regulatory Implications and Future Steps
Once the 60‑day disclosure period closes, the PSC will analyze the submitted information to determine whether the current patchwork of utility‑level AI governance is sufficient or whether baseline standards are needed. Potential outcomes range from issuing non‑binding best‑practice guidance to enacting formal rules that mandate periodic AI audits, bias‑testing regimes, or cybersecurity‑specific controls for AI‑driven grid management tools. The commission has signaled that it will weigh the benefits of AI—enhanced efficiency, cost savings, and improved service reliability—against the identified risks, seeking a balanced approach that protects consumers without stifling innovation. Industry observers note that New York’s move could become a template for other states grappling with similar questions about AI in essential services.
Stakeholder Reactions and Industry Preparedness
Reactions from the utility sector have been mixed but generally cooperative. A spokesperson for National Grid emphasized the company’s commitment to transparency, stating, “We welcome the PSC’s initiative and are prepared to provide a full accounting of our AI applications, along with the robust safeguards we have in place to ensure reliability and security.” Some smaller utilities, however, have voiced concerns about the administrative burden of cataloguing numerous AI tools, particularly those embedded within third‑party software suites. Consumer advocacy groups have largely praised the inquiry, arguing that heightened scrutiny is necessary to prevent algorithmic discrimination in billing or service prioritization. Cybersecurity experts warn that as AI models become more attractive targets for adversarial attacks, utilities must bolster model‑hardening and anomaly‑detection capabilities alongside traditional IT defenses.
Conclusion: A Watershed Moment for AI Oversight in Critical Infrastructure
The PSC’s directive marks a significant step toward formal oversight of artificial intelligence within New York’s utility landscape. By compelling detailed disclosures and probing the associated risks, the commission seeks to ensure that the transformative potential of AI does not come at the expense of service integrity, consumer fairness, or grid resilience. As the 60‑day deadline approaches, the forthcoming data will shed light on how deeply AI has penetrated everyday utility functions—and whether additional regulatory guardrails are warranted to harness that power safely and equitably. The outcome will likely reverberate beyond New York’s borders, influencing how other states and federal agencies approach the governance of AI in the nation’s essential services.
https://www.wwnytv.com/2026/09/17/state-orders-national-grid-other-utilities-disclose-all-ai-use/