Nearly nine out of ten customers call their utilities only when they have a billing problem. Despite billing’s central role, some researchers have estimated that the majority of utility bills contain errors.
Under regulation, billing systems were revenue management devices, not customer interaction systems. In both transitioning and deregulated markets, however, billing systems not only manage revenue; they are the primary “touch vehicle” for the new corporate asset, the customer. Bills can be used to promote new products and services, communicate important customer service information, and convey corporate messages and brands. If done right, customers can be transitioned to consider their bill as a form of extended customer service.
New customer management systems that include complex billing and self-service capabilities for both commercial and industrial (C&I) and mass-market customers are now gaining tremendous market momentum. Utilities and energy retailers are leveraging Web-based billing applications to quickly address their core business drivers-from enhancing customer service to managing operational costs.
Billing means business
Billing has always been considered a major cost center. In a regulated market, the cost of billing was generally recoverable through the public utility commission. In a competitive market, no such safety net exists. Some utilities have spent multiple millions of dollars on “deregulated” customer information systems that never went into production. Some retailers are no longer solvent because their billing systems failed to handle the requirements of competition-or to get accurate bills out in a timely manner.
In the new world of the transitioning energy industry, it is critical for both mass market and C&I energy providers to be able to flexibly structure bills for multiple markets, premises, services and commodities-supporting all market models including rate ready, bill ready and dual billing.
Bills must be timely; they must be accurate. And, by providing both hard copy and electric bills, your customers will have the added convenience of choice, and you have the opportunity to become much more cost effective by enabling your customers to view and pay their bills online.
MidAmerican Energy Co., a wholly owned subsidiary of MidAmerican Energy Holdings Co., provides both regulated and unregulated electric and natural gas service to more than 1.3 million customers in Iowa, Illinois, Ohio, Nebraska, Kentucky and South Dakota. MidAmerican needed to manage gas and electric accounts for residential and C&I customers on a single system, and to bill multiple products, services and premises on a single statement. They also needed to include non-energy retail products, including street lighting, heating and cooling equipment.
MidAmerican turned to Peace Software’s Energy system for customer management of its unregulated retail energy business.
The new system has the built-in functionality to control the timing of receiving information from other market participants. Should electric usage information arrive weeks ahead of gas usage information, Energy is able to store and calculate both sets of information to produce consolidated bills for MidAmerican’s dual service customers.
“Our customers will enjoy the added conveniences the system provides, while we reap the benefits of greater productivity and cost-savings in our unregulated retail call center and credit department,” says Sara Schillinger, vice president, market strategy and administration, at MidAmerican.
Simplifying the process with an intelligent system for managing complex interval billing and contract management for C&I customers, an energy service provider can become a value-added energy partner to these large customers rather than simply being a supplier from which they could easily switch.
For example, flexible contract management of customized and consolidated bills provides C&I customers with the convenience of a single or multiple bills for premises, products and services. Information-rich 3D graphs that visualize interval energy usage can act as a powerful account management tool to identify and recommend optimized energy consumption for C&I customers. (See screen capture.)
In addition, demand-based pricing is critical when trading on the open market, and supporting interval demand data processing is required for providing excellent service to C&I customers. As a result, the billing system should support complex time-of-use billing based on season, time zone, and day-of-week parameters.
One energy retailer in Michigan supplies electricity to some of the largest commercial and industrial companies located in that automotive-dominated state. They needed a flexible billing system to set up and manage customized rate contracts, bill presentation and payment dates.
They wanted to offer C&I customers the convenience of single consolidated bills for multiple premises and meters. The goal was to provide these consolidated bills as a new service that would reduce their customers’ accounts payable workloads as well as save themselves money in transaction costs.
As a result of working with Peace Software, their customers can determine how they want their invoices to look and negotiate different payment cycles to suit their own internal business processes. For example, one large C&I customer prefers a consolidated invoice in electronic spreadsheet format for its 1,000 premises, which are automatically downloaded into an accounts payable system to pay in one lump sum. Prior to the implementation of the Peace Software Energy suite, this C&I customer recieved a thousand separate invoices with disparate payment dates.
Beth Formby, industry analyst with Peace Software can be contacted by phone (1-866-40-PEACE) or via email (beth.formby@peace. com). More information on Peace Software’s Energy system can be found at their Web site: www.peace.com.