New York regulators have launched an investigation into how public utilities are deploying artificial intelligence systems, warning that the technology poses risks to critical infrastructure. The New York Public Service Commission issued an order on September 17, 2026, requiring electric, gas, and water companies to report all AI applications within 60 days. The commission expressed concern that growing reliance on AI for day-to-day operations could threaten the safety and reliability of the state's essential services.
The commission's directive requires utilities to submit a complete written inventory describing every instance where AI systems are used in their operations. Companies must also reveal their policies, procedures, and protocols governing the emerging technology. The order defines an AI system as a machine-based system capable of making predictions, recommendations, or decisions that influence real or virtual environments based on human-defined objectives. Utilities across New York are already using the technology in various ways: National Grid has deployed a system called GridCARE to free up interconnection capacity for large-load customers, while the New York Power Authority uses AI to examine drone-captured data for vegetation management. Consolidated Edison, serving New York City, told Utility Dive it applies AI to customer service, system inspections, identifying potential equipment problems before they affect customers or public safety, and strengthening inspection and mapping capabilities.
Regulators warned that AI systems are vulnerable to hallucinations, algorithmic biases, transparency issues, data privacy concerns, misconfiguration errors, cybersecurity attacks, and functional brittleness. "These potential risks may have negative consequences for the safety and reliability of New York's critical infrastructure," they stated. The commission noted that despite this known deployment, "the actual extent and scope of AI systems in New York utility operations remains unclear." PSC Chair Rory Christian called the rapid evolution of AI "a double-edged sword for utilities," saying that while it can deliver cost efficiencies and improved operations, "it also presents serious risks that must be evaluated and addressed appropriately."
The commission plans to assess the procedures and protocols utilities submit, measuring them against commonly accepted AI governance frameworks for adequacy and robustness. The inquiry reflects mounting concern that utilities are increasingly turning to AI for basic tasks without fully understanding the vulnerabilities they're introducing. Con Edison indicated it will continue evaluating opportunities as technology evolves, suggesting AI adoption will only accelerate. The 60-day deadline puts pressure on utilities to catalog systems they may not have previously documented in a comprehensive way, forcing a reckoning with how deeply AI has already embedded itself in operations that keep power flowing and water running across America's largest city and beyond.