In finance and accounting, utilities typically have relied on spreadsheets to reconcile accounts, track budgets, project revenue, and measure construction work in progress. Many finance and accounting tasks can be time-consuming and mind-numbing. Today, technology, including artificial intelligence, is changing that — speeding up some tasks and elevating others to forward-looking, value-added functions.
Finance and accounting typically emphasize historical reporting over forward-looking analysis, said Russ Hissom, senior manager for energy and infrastructure at Baker Tilly Advisory Group LP, a large U.S. tax, advisory, and assurance firm.
Until now, utility financial analysts and accountants have had to spend a lot of time cleaning up and standardizing financial data, which sometimes arrives in a less-than-complete or inconsistent format. Each month, a lot of manual data massaging has been needed to put information into acceptable templates for board and council meetings.
The gradual embedding of AI functionality into workplace software packages means that the future will not look like the past, Hissom said. He spoke on this topic at the American Public Power Association’s 2025 Business & Financial Conference, and he is scheduled to speak again at APPA’s spring Accounting and Finance Virtual Summit.
“AI tools are helping utilities maximize the value of the financial information they have,” Hissom said. Those tools can quickly automate reconciliations for banks, subledgers, inventories, and project costs, recognize data patterns, and process documents such as invoices.
“You’d be surprised how many times a utility orders 100 poles and 80 are delivered,” he said. Those gaps must be reconciled, and doing so has historically involved tracking those costs in separate spreadsheets or systems that can’t be easily integrated.
In some instances, Hissom said, public power utilities are using AI to prepare rudimentary rate-case materials that will be reviewed by staff. Best-practice utilities also are using AI to integrate formerly separate processes for financial planning, accounting, load forecasting, revenue recognition, and other functions.
He said that a variety of platforms, including those from Workiva, BlackLine, UiPath, Automation Anywhere, Power BI, and Tableau, are transforming finance and accounting functions including financial reporting, Federal Energy Regulatory Commission filings, board reporting, monthly closes, account reconciliations, transaction matching, accounts payable, and tracking key performance indicators.
“AI is very useful at assembling and analyzing data, but it is unable to exercise judgment,” said Hissom. “Deploying AI is like hiring an intern: useful for some tasks, but the work has to be checked and confirmed.”
Room to Improve
Bart Miller, the chief financial officer for Heber Light & Power in Utah, sees potential for technology to reduce a lot of the manual work involved in utility accounting.
“It can be very time-consuming to convert data into the formats required by a utility’s systems,” he said. “Typically, that is not a value-added activity.” He said he recently spent about six hours over three days manually manipulating data so that it aligned with the utility’s budget software.
“Right now, utility finance and accounting platforms are clunky, but providers of those platforms are being pushed hard to modify their systems for our market, and they are responding,” Miller said.
A growing number of utilities are using software with AI capabilities to automate their functions and processes. Some have been using AI tools embedded in Excel to project energy use curves and to help prepare graphs and presentations.
Going forward, Hissom and Miller agreed that providers of existing finance and accounting systems will be forced to broaden and customize their systems to meet the needs of the large number of small and midsized utilities that could become customers. That process is underway, but it’s just getting started.
“Once the big dogs in the utility industry adopt it, it will spread,” Miller predicted. “Right now, the platforms are not purpose-built for utilities.”
Heber Light & Power serves about 16,000 customers.
Removing Silos
Hissom believes AI will have a dramatic positive benefit on public power utilities across a range of departments, not just finance and accounting.
“There are opportunities for dramatic increases in productivity across the utility enterprise, akin to the introduction of computers in the workplace, spreadsheets, the internet, and [enterprise resource planning] systems,” he said.
“The biggest benefits to utilities will come from analytics, such as customer energy-use projections, inventory management, and calculating how electric vehicle charging will impact the local distribution system,” predicted Miller.
These functions are closely related to financial planning, though they often reside in different departments. AI can help tear down those internal silos and drive organizational change. “Right now, we’re just getting started,” said Miller. “As an industry, most of us are trying to figure out how to crawl, while some are walking and a select few are running. If I had to liken it to a sport, I’d say we’re at the opening kickoff in a football game.”
Need for Data Security Limits Use
Hissom and Miller agreed that using AI on locally hosted, internal applications for finance and accounting is fine because the data stays in-house. However, public platforms such as ChatGPT, Claude, or Gemini, which add users’ work to their cloud-based large-language models, are a no-no, at least for now, because they exist externally and thus are subject to hacking.
“Data security is so important to utilities,” said Hissom. “Utilities have access to a lot of sensitive data. You can’t have a customer’s personally identifiable information like their Social Security number, banking information, and passwords out there floating in the cloud.”
“The opportunities for malevolent actors to use or sell that information is why utilities, banks, credit card companies, and government agencies operate under strict data-security protocols.”
Hissom said utilities would have to purchase a special enterprise license from those software companies to make sure their data is not being used to train the companies’ AI models. “As long as the data stays in-house and out of the public domain, it’s okay.”
Miller agreed. “There is a lot of anxiety about using cloud-based applications because of data security issues.”
Miller said he has used AI-enabled software to perform financial planning and analysis, though he worried about its data security.
Planning in a Changing Risk Environment
Outside of utilities, financial planners are using technology to better understand and forecast a variety of financial pressures and risks surrounding energy infrastructure and utilities.
For example, Intercontinental Exchange has built a powerful platform that uses algorithms and various historical data streams to provide forward-looking risk assessments for utilities and other types of bond issuers. Bond analysts and asset managers are using the Intercontinental Exchange’s Climate Analytics Platform, or Intercontinental Exchange’s CAP, to gain a more comprehensive understanding of utilities’ exposure to physical hazards like wildfires, hurricanes, and floods.
Utility financial planners can use this platform to better understand their own changing risk environment as well as the way the investment community views utility projects.
“Public power utilities that want to stay abreast of the way the financial community assessment of risks is changing have been able to gather that insight from our platform,” said Andrew Teras, Intercontinental Exchange's head of product strategy (Americas).
The platform turns qualitative assessments, such as, "We’re a municipal utility located in California, so we may have a wildfire affect our service area at some point in the future,” into more of a data-driven and long-term probabilistic outlook, such as, “Within our service area, the estimated percentage of property value at risk from wildfires may be as high as X%."
“There is a huge library of public data about geography, locations of physical assets, climate, census tract demographics, disposable income, property values, and energy affordability,” said Teras. “All of those data streams affect a utility’s creditworthiness and utility financial planning. Our platform draws on all of those data sources and more to provide users with better insight into the specific risks facing bond issuers.”
Utilities could use that intelligence to double-check that they are fully insured against wildfires or other extreme events, or to calculate how a planned price increase affects the affordability of their services compared to peers. ICE CAP also has tools to assess the economic profile of a given census tract.
One metric of the changing risk environment facing utilities is the rising impact of weather disasters tracked by the U.S. government. The numbers show an unmistakable upward trend. The rolling five-year average impact is about $150 billion per year, up sharply from what it was 10, 20, or 30 years ago. And the number and value of those disasters align with documented gains in global average surface temperatures, as tracked by the National Oceanic and Atmospheric Administration.
Bond analysts and bond investors are, in fact, using climate data and a variety of other data to better assess the creditworthiness of utilities, Teras said.
“There has been an increasing trend to rigorously measure risks and benchmark them, both quantitatively and qualitatively,” he continued. “The risk-assessment landscape has changed considerably in recent years. Increasingly, we are able to quantify risks that once were only assessed qualitatively.”
Hard quantitative metrics, such as the age of a utility’s assets, its rate of customer growth, and average number of days customer are behind in their bill payment, increasingly are being combined with qualitative metrics like risk profiles to provide the financial community with a more comprehensive understanding of all the risks that could threaten a utility’s ability to repay a bond.
