Hudson Hollister of HData: Automating Compliance and Business Intelligence for FERC Licensees
February 8, 2022
HData is a tech company that has developed a platform that uses regulatory data to automate compliance and business intelligence for FERC-regulated entities. Hydro Leader spoke with HData founder and CEO Hudson Hollister about leading the charge for searchable data and the next generation of smart dashboards and predictive analytics to inform financial management and regulatory compliance.
Hydro Leader: Please tell us about your background and how you came to be in your current position.
Hudson Hollister: I used to be a frustrated bureaucrat. I was actually a lawyer working for the Securities and Exchange Commission (SEC). As many of your readers probably know, public companies have to report their finances to the SEC. When I was at the SEC, I discovered that the agency was not using searchable data to analyze those reports. Lawyers and accountants at the SEC were using pencils and calculators to check the finance math. I resigned from the SEC and went to work on Capitol Hill to pass reforms requiring the SEC and other regulators to move away from unstructured, nonsearchable documents and start using data fields instead to track all the financial numbers.
That work led me to the Federal Energy Regulatory Commission (FERC). In 2012, I started a nonprofit called The Data Coalition, which recommended that government regulatory agencies switch from documents to structured data. In 2015, FERC started working on the eForms Refresh Project, which culminated in FERC’s announcement in 2019 that it would transform the unstructured and old-fashioned PDF forms into searchable data using a data format called XBRL. With XBRL, every number in every schedule and form is its own data field. That transformation from unstructured documents to searchable data allowed the global standardization and exchange of financial data and enabled us to build the HData platform.
Hydro Leader: Please tell us about HData’s products and services.
Hudson Hollister: HData is an early-stage tech company. We have a platform that works with FERC regulatory data. Our platform does two main things: compliance and business intelligence. For compliance, our platform can take financial spreadsheets and automatically turn them into FERC reports. We can then automatically check those reports against all the different rules that FERC has published and file them. For business intelligence, our platform can compare the finances, production, and performance of any FERC-regulated energy company to any other or to the industry as a whole. We do that using averages that reach 10 years into the past and are calculated in real time every 10 minutes as reports are filed.
We have 29 enterprise customers in the energy industry. In December, we announced a major partnership with Alabama Power to design HData Insights, the next generation of energy regulatory business intelligence, and to bring smart dashboards and predictive analytics to inform financial management and regulatory compliance.
Hydro Leader: Is FERC Pro your major offering, or is it one of several?
Hudson Hollister: The HData platform is our major offering. We’ve used the FERC programs for the first version of our platform. Currently, our platform offers compliance and business intelligence. Right now, our main compliance tool is the IRIS Carbon platform, and our main business intelligence tool is our Data Hub. We just closed on $3.1 million of seed capital, so we’re going to be expandingthe platform, and we’ll be using the HData brand for that. Thanks to the investment and the new partnership with Alabama Power, we’re going to build additional business intelligence solutions, including HData Insights, a set of dashboards that automatically give executives the information they need to benchmark their production and their performance against any other recommended company.
Hydro Leader: What are the main tasks that your clients need to carry out for their FERC licenses, and how are you helping with those?
Hudson Hollister: Until recently, companies have had to take their financial spreadsheets and manually type every number into an outdated software platform called Microsoft Visual FoxPro. That is over, thanks to the data format FERC announced in October 2021. Our platform and other compliance tools can take a company’s spreadsheet and automatically turn it into the required report. That cuts out that manual transcription step.
On the business intelligence side, most of the FERC-regulated energy companies that we talk to do some sort of benchmarking. They might compare their operation and maintenance (O&M) expenses with those of other public utilities, or they might use metrics like O&M expense per megawatt-hour, O&M expense per customer, or O&M expense per dollar of revenue. Most public utilities do that kind of comparison. Until recently, it has been a laborious manual process. Most of the energy companies that we talk to have some kind of monster spreadsheet in which they manually enter numbers they derive from FERC forms. If they ever want to change the way they’re calculating metrics like that, it takes weeks. To add another company to those comparisons would be a huge project. We can do all those comparisons in 45 seconds.
Hydro Leader: What kind of access do your clients generally need to give you? Do they just turn over those spreadsheets, or is there a way that you can get information on an automated basis?
Hudson Hollister: If clients are using our platform for compliance, then they need to put their numbers into it in order to create the forms that our platform will file for them with FERC. If customers are using our business intelligence tools, they don’t need to give us any kind of access at all. All the analyses that we run come from publicly available data sources.
Hydro Leader: Do you also provide services for the renewal of FERC licenses?
Hudson Hollister: We can’t automate the preparation of FERC license applications, but we can automate any of the numbers that have to go into those applications that are derived from reports like Form 1 or Form 3-Q.
Hydro Leader: Do you have any hydro clients yet?
Hudson Hollister: Several of our customers have hydro production, but we haven’t zeroed in on that application yet. I’m excited to have a chance to do that. Because public utilities separately break out the finances and performance of each plant in one of the pages of their reports, we can track the finances of any plant against other plants, facility by facility, from 2011 to the present. Those who are familiar with FERC forms also know that when public utilities report their generation, their output, and their costs, they have to split them out by mode of generation. There’s a whole separate line of data for hydro. That means we can derive robust analytics and compare hydro with the other modes, utility by utility as well as plant by plant.
Hydro Leader: How does your platform differ from others on the market?
Hudson Hollister: We don’t have any competitors. As far as I know, HData’s platform is the only commercially available way to access all the data that are now available. I hope that we do get competitors, because it’s going to push us to move further and faster and to serve more energy companies.
Hydro Leader: How should an energy company, or anyone who uses regulatory data, get in touch with you to see if HData’s platform is right for them?
Hudson Hollister: If anybody is interested in doing instant analysis and comparison using any of the numbers that are contained by FERC Form 1, Form 3-Q, or other FERC forms, they should go to www.hdata.us and check out the publicly available information and videos of our solution. They can also contact us at email@example.com.
Hydro Leader: What is your vision for the future of HData?
Hudson Hollister: We are going to expand our compliance capabilities to include the additional forms and filings that regulated energy companies have to perform. We also plan to expand the business intelligence side to include more of the information that is filed by recommended companies. We’re going to integrate those two things together so that compliance can become smarter and business intelligence tools can provide historical, current, and predictive views of business operations.