Communicating with the Masses–Are Utilities Ready?
Surveys show a slow growth for utility web sites, but to be successful the sites need to be more interactive.
By Steven Wood, Associate Editor
The Web is being portrayed as the next communication tool for the masses. It has been predicted that this wave of Internet use will replace the phone, postal service and customer interaction. It will definitely influence information technology (IT) and the way utilities view their legacy systems. According to visionaries, Internet users will sit at home and conduct all their personal and professional business from the comfort of their living room sofas. Commercials show the happy family laughing and playing on the web, purchasing new cars, talking to grandma, shopping for groceries and paying their utility bills. All with a little click here and a little click there.
There is a lot of truth to this scenario, but maybe not as soon as some might believe for the utility industry. According to a recent energy industry survey conducted by the META Group Inc., an IT research and consultation company, less than five percent of all utility business will be conducted via electronic commerce (e-commerce) in 1999. The survey indicates a growth in this area though, with 30 percent of all customer service and retail bill payment being done over the Web by 2004.
In the same survey, respondents indicated that, over the next five years, most energy utilities expect their customer information systems (CIS) and marketing systems to be strategic IT assets, while their billing and metering systems will only have operational value. According to CD Hobbs, META Group`s energy information strategies vice president and director, “These results underscore our belief that selective outsourcing of metering and billing will increase dramatically during the next five years. In the same time frame, we expect energy utilities to make significant investments in technologies that support customer acquisition and retention.”
At the AGA/EEI IT Conference this past November, it was evident that there are numerous companies ready to capitalize on this increased interest in IT and the use of the Internet by utilities. Many companies catering to utilities currently have products ready for the Web. The products range from billing systems to home energy audits to better customer service systems. These products are designed to improve a utility`s customer retention during the deregulation rollout, decrease the cost to efficiently service customers, and improve the information sharing between the customer and the utility.
While many utilities currently have Web sites, several are not interactive Web sites. A related META Group evaluation of nearly 400 utility Web sites has shown that most utilities currently offer little or no customer interactivity via the Web. Those few companies that have implemented Web-based customer interaction are generally disappointed with the level of use by their customers according to the META Group. The research company predicts that the lag between Web usage in the utility industry and other customer service industries will close as the energy industry becomes more competitive. The META Group also believes that the lack of interactivity and low level of usage are typical of a first foray into e-commerce and will improve dramatically as utilities learn to use the Web as a business channel.
Internet Success Stories
There are some utility Internet success stories though. Wanting to cater to a broad market base, Central Illinois Power and Light Co. (CILCO) decided to provide fast, efficient service to its customers via the Web. With pending national deregulation, the Internet provides CILCO and other utilities the ability to interact with their customers as never before. The site www.cilco.com first went live in 1995 as a static billboard site. Encouraged by their initial success, the Web development team was charged with developing a new enhanced site within a very short time period. Originally, the site received 12,000 to 13,000 customer hits per month. Now, customers are hitting the site more than 400,000 times per month to download rate and billing information for both gas and electric services. The new site offers customers Web access to the information stored in the utility`s legacy systems. With the development of its first dynamic Web site a success, CILCO is looking to offer additional Web-based customer services both regionally and nationally.
To move to a dynamic Web site, CILCO used a software program from Intelligent Environments (IE). By using the IE Amazon software, CILCO was able to make changes quickly and easily. With the CILCO Web site, seven databases are utilized and most of the data resides on the Web server itself, which is duplicated through Amazon. To facilitate the development efforts, JAVA and HTML Internet standards were used. This code is hidden and runs on the server, but doesn`t come up anywhere in the user interface to the Web.
CILCO`s relationship with IE emphasizes how the Internet is playing a larger role in deregulation. As utilities look to become more competitive, the Web provides an opportunity to improve customer service by offering billing as well as service and account information in a user-friendly, interactive environment. CILCO expanded its Web site to provide access to its legacy systems and provide additional services to its residential, commercial and industrial customers.
Another example of utilizing the Web to provide better customer service can be found at the Commonwealth Edison (ComEd) Web site. This site, and specifically the Online Home Energy Audit, was a 1998 Utility Automation Innovation Award winner for new technology.
ComEd had been providing written home energy audits to its customers for several years at a cost of approximately $20 per audit. These audits were well received by its customers, but they had to wait weeks for the surveys to be collected, the data to be processed and the results to be mailed back to them. Additionally, ComEd had to wait even longer before the market research data gleaned from a given audit could be used in marketing programs.
By contrast, when the utility decided to put the home energy audit online, ComEd has been able to provide customers with energy audit results in seconds rather than weeks, and customers can change their audit responses and rerun the analysis just as easily. The Web site is designed to be user friendly, with an easy to follow flow (see figure). Meanwhile, ComEd receives timely market research data–already in electronic form–as soon as the customer clicks the generate report button. This allows the company to target new products and services more accurately while reducing the amount of time and money spent on the process. Instead of spending $20 per report, ComEd now spends a few pennies per request.
Thousands of ComEd customers have taken advantage of the online home energy audit. ComEd has also found that one out of every five participants chooses to provide feedback in the form of electronic mail. The home energy audit feedback has been overwhelmingly positive, with less than one percent of the responding customers expressing dissatisfaction with the service or ComEd. In fact, most responses indicate a pronounced interest in the service, and many customers request additional information on things like energy-saving programs and measures, alternative rate structures, account adjustment services and high bill resolution services.
ComEd utilized an outside company to implement the home energy audit online. The Windows NT server-based audit is maintained by Energy Interactive, the developer of the Online Home Energy Audit. However, ComEd customers may not even realize they have left ComEd`s own systems. Energy Interactive developed the Home Energy Audit application using Visual C++ and EI`s customer software libraries.
Web site development in the utility industry is growing and maturing at an alarming rate. But to be successful, and to justify the costs associated with developing a web site, it has to provide valuable information to the consumer and the utility. Deregulation is dictating this with increased competition for the customer. At the AGA/EEI IT Conference, David Biegler, Texas Utilities president and COO and AGA chairman said, “If you are not in constant contact with your customers, if you don`t know what products and services they want, when they want them, and at what price they are willing to pay, well, there is somebody else out there who will find out those things, and end up taking your customer away from you. Therefore, today`s utility executive needs to know how to best communicate with the customer. Information technology must facilitate a two-way conversation in which the customer`s needs are relayed to the utility, and the utility`s response is relayed to the customer, and then the customer`s satisfaction is relayed back to the utility.
“What`s more, that conversation must be convenient for the customer. Customer call centers, automatic meter reading, Internet customer choice programs and billing are ways for a company to save money, but they must also be designed with the goal of customer convenience and satisfaction foremost in mind.”
The abundance of solutions available for utilities to increase communication with customers through the Internet will continue to increase, and this will aid the utilities, as well as other providers, in ensuring improved communications, products and services to their customers.