Utilities must balance regulatory mandates, unrelenting cost pressures and tight capital budgets for new systems with the need to ensure excellent service. One increasingly important customer service requirement for utilities is providing customers with more options for receiving and paying bills.
Xcel Energy better positioned itself to meet these challenges by deploying an integrated receivables hub from Wisconsin-based Wausau Financial Systems. The solution has enabled the utility to aggregate and automate its electronic and paper-based payments processing, resulting in reduced operational costs, faster turnaround, improved funds availability and lower banking fees.
Headquartered in Minneapolis, Xcel Energy is a U.S. electric and natural gas company with annual revenues of $10.3 billion. In business for more than 130 years, the utility serves 3.4 million electricity customers and 1.9 million natural gas customers across eight states: Colorado, Michigan, Minnesota, North Dakota, South Dakota, Texas and Wisconsin. Xcel Energy processes all of its remittances — representing a daily average of about $19 million — in a centralized operation.
Before deploying Wausau’s solution, Xcel Energy processed its remittances using another vendor’s software running on the Microsoft Windows NT operating system. The system included an OPEX 150 mail sorting, opening and extraction device with an image extraction module; two high-speed document transports; and four Omation envelope openers for any exception mail.
Each day, the utility backed up its files and images to digital linear tape; remittance images and data were copied to CD-ROMs for long-term storage and payment investigation research.
Over time, the system became less stable as fewer and fewer software updates and upgrades were made available. At the same time, Xcel Energy wanted to take advantage of emerging technologies such as accounts receivable check conversion, image cash letters and Web-based image and data archive.
The utility also was looking for ways to maintain its low operational costs, comply with a variety of corporate standards, and accelerate response times to customer payment inquiries.
Xcel Energy initially investigated the possibility of outsourcing its remittance processing. Once the utility made the decision to keep its processing in-house, it created a team representing its customer operations, information technology and facilities/construction groups to evaluate available solutions.
After an extensive evaluation, Xcel Energy selected Wausau’s integrated receivables hub.
“We chose Wausau Financial Systems because its integrated receivables hub met all of our business needs: it was competitively priced, it included the right mix of hardware, and it provided an archive that would allow us to instantly access checks,” explained Excel Energy Supervisor Linda Follmer.
Xcel Energy’s new solution is comprised of Wausau’s integrated receivables hub and Web-based archive, an OPEX Eagle mail sorting, opening and extraction device with an IEM, OPEX rapid mail extraction desks with scanning capability, and NCR image capture transports.
The Wausau solution offers operational improvements over the utility’s old remittance system.
The combination of Wausau’s integrated receivables hub and the OPEX Eagle IEM enables Xcel Energy to perform courtesy amount recognition, image quality assurance and ARC Conversion or Check 21 in-line at mail extraction, accelerating processing and reducing staff intervention.
Eighty-four percent of the utility’s remittances are opened on the OPEX Eagle with 68 percent of those transactions processed in-line without operator intervention. Envelopes not processed on the OPEX Eagle are opened and prepared for image capture on the OPEX rapid extraction desks, which reduce operator intervention.
The integrated receivables hub automates all of the utility’s transaction types, including singles, multiples, check-only transactions, and check-and-list transactions. ARC and Check 21 have increased the funds available for deposit each day. And managing returns electronically speeds the process by several days compared to paper-based returns handling. Wausau’s integrated receivables hub also provides a module for automating ARC returns.
The Web-based archive has improved the utility’s customer service by providing instant access to remittance images and investigations. It also allows for long-term archive storage.
“Xcel Energy demonstrates the power of an integrated receivables hub in automating, aggregating and accelerating nearly every aspect of the receivables processing lifecycle,” said Kathy Strasser, executive vice president, product management and sales support, Wausau Financial Systems. “Xcel E nergy and Wausau Financial Systems have proven to be a winning combination. We look forward to helping Xcel Energy build upon this success.”
Wausau’s integrated receivables hub provided Xcel Energy with significant tangible benefits:
“- 53 percent reduction in bank fees as a result of ARC Conversion
“- 16 percent reduction in bank fees as a result of ICL deposits
“- 27 percent rise in same-day deposits with an additional 5 percent increase forecast for 2012;
Follmer said the utility’s goal is to now process 85 percent of its remittances same-day.
With mailed-in payments now representing only 41 percent of Xcel Energy’s transaction volume, these cost savings have been critical to keeping the utility’s operational costs under control.
The utility continues to look for ways extended the benefits of its integrated receivables hub to other departments throughout the organization.
Xcel Energy is still looking for ways to leverage its integrated receivables hub to reduce costs and add value. In 2012, the utility plans to upgrade to the newest versions of Wausau’s integrated receivables solutions set. Beyond 2012, Xcel Energy may replace its NCR transports with OPEX AS180 transaction processors, which are better suited to automating the complex transactions not processed by the OPEX Eagle.