Artificial Intelligence for Natural Gas Utilities: A Primer

Abstract

Modern natural gas utilities face numerous challenges and competing priorities from various stakeholders. Policymakers, customers, and advocacy groups want to see gas utilities improve performance on safety, reliability, resilience, affordability, and environmental stewardship. State utility regulators — public utility commissions — are responsible for overseeing utility performance, ensuring that ratepayer funds are being spent in the public interest, and aligning utility goals with public goals. The use of new technologies is critical to enabling cost-effective performance on these attributes. Artificial intelligence (AI) is a widely used term among utilities and regulators, but the term means different things to different stakeholders, and it is often used to describe data analytics approaches that fall short of the formal definition of AI, which is: “…the ability of a machine to receive inputs and produce a behavior or reaction similar to that of an intelligent human being.” AI (and related tools, techniques, and technologies) can help utilities solve current and emerging challenges. By combining customer and system data with analytical tools and technologies, AI can augment human decision-makers by assisting in identifying problems and events before they occur, enabling resources to be more efficiently directed across utility infrastructure. The intended primary audience for this primer is state regulators, although utilities and other stakeholders might also find it useful and relevant to improve their awareness of AI. The objectives of this primer are to: (a) offer a set of broadly applicable definitions for AI and related terms, allowing regulators, utilities, and other stakeholders to speak the same language; (b) discuss how AI is currently being implemented in the gas utility sector; and (c) understand the challenges affecting AI solutions and how tools might be implemented in the future. This primer fits within NARUC’s goals of providing impartial information to improve the ability of public utility commissions to regulate in the public interest. As such, this primer does not seek to recommend AI over any other investment, nor does it endorse any particular vendor, product, or approach. It does seek to prepare state regulators to oversee AI investments by sharing information about the current landscape of commercially available tools. To these ends, the primer is organized as follows: Section I discusses the current environment in which natural gas utilities operate and how AI, when thoughtfully designed and implemented, can enable utilities to achieve performance goals; Section II offers definitions of AI and related terms within the data analytics discipline; Section III provides three current opportunities for which AI can offer solutions: replacing aging gas distribution infrastructure, preventing excavator damage to gas distribution infrastructure, and improving energy efficiency programs. This section discusses each problem statement in detail. Second, Section III includes a discussion of how costs and benefits of investments to solve each problem are measured. And third, this section offers real-world examples of utility implementation of AI solutions; Section IV discusses challenges with implementing AI, both from the perspective of utilities and regulators; Section V suggests areas in which AI could feasibly be implemented in the near future; Finally, Section VI offers concluding thoughts and areas for further research.