Wired Homes Expect More from Energy Providers
Findings of a new survey suggest that consumers are interested in dealing with their energy suppliers over the Internet, but only half the customers who deal with energy providers over the Internet are satisfied with the results. According to the survey these high-tech households are more critical of their utilities than other consumers. One in five of these customers say they will shop online for a new energy provider.
The results are part of the year-end 1999 national residential customer assessment conducted by RKS Research & Consulting. RKS interviewed 1,635 heads of households across the United States during October and November 1999.
While residents give their electric suppliers high marks for technical competence, they register negative or no opinions in critical areas of customer focus, such as economic development, flexible service and billing options, and communications, according to the survey. Likewise, U.S. households rate their utility representatives as friendly but inflexible on service transactions. The RKS survey data indicate that increased customer orientation, plus strong operational performance, will distinguish one competitor from another in a deregulated environment.
According to the survey data, six in 10 U.S. households now contain at least one personal computer, and half of the computer owners with Internet access have purchased products or services online. Among the customers who contacted their utility online, only 54 percent believed the transaction was handled to their satisfaction. Those same consumers rated their energy supplier lower in such important dimensions as value, reliability and loyalty.
“These low scores add up to lost opportunity for electric utilities, as well as encouragement for competitors,” said Charleen Heidt, RKS vice president in charge of the residential survey. “Since the Internet shifts control to the consumer, enabling the customization of product, service, and billing options, energy suppliers need to re-think their current one-dimensional ‘push’ business model.”
According to the RKS survey, one in five U.S. households now say they can choose their electricity supplier, a sharp increase from only 12 percent a year ago. Among those with choice, 5 percent have actually switched suppliers, more than double the 2 percent reported a year ago. Residents of the Mid-Atlantic and Pacific Coast states are the most active and vocal about choice, according to the survey.
At the same time, deregulation and choice are having a positive influence on customer perceptions of electric suppliers, the RKS data indicates. Residential customers in choice states view the performance of their utilities more favorably, and say their electric service is a good value. These customers are also more likely to recommend their supplier to others, according to the survey.
But customer expectations of their present utility rise with deregulation, the RKS survey points out. For example, nearly four in 10 residential consumers believe their electric supplier will perform better and be more responsive to their needs. A quarter of those sampled feel they will experience fewer power outages as a result of deregulation.
The same national survey predicts that consumers will select their future energy provider on the basis of overall value-not just price. Survey data confirm that future residential customer behavior will be influenced most by a combination of supplier performance, perceptions of reliability and actual outage experience, and that these factors will count for more than simple cost savings.
Energy E-Comm.com Critiques Regulatory Web Sites
Energy E-Comm.com, a business search platform for utilities and energy executives, has released a ranking of 50 state energy regulatory commission Web sites plus the District of Columbia and the Federal Energy Regulatory Commission (FERC). The top three regulatory commission Web sites according to Energy E-Comm.com are: Florida Public Service Commission, Maryland Public Service Commission, and Massachusetts Department of Telecommunications and Energy. Energy E-Comm.com will e-mail the full ranking, plus commentary on the top five sites and a critique of the FERC site, to registered visitors to its Web site (www.energyecomm.com).
In a similar study released in December 1999, Energy E-Comm.com ranked the corporate Web sites of 100 energy and utilities companies. After that survey, Energy E-Comm.com’s CEO Vinod Dar criticized utility sites in general, saying that far too many sites offered ‘three clicks to no useful, actionable information.” Dar said at the time that energy and utility sites were generally poor with a huge gap between actual performance and best practice.
Fred Abrew, Energy E-Comm.com chairman, said that the regulatory Web sites do not address the needs of their customers. He offered criticism similar to that which the company had levied on utility Web sites after the December study. “Like the brethren they supervise, most of the regulatory sites do not provide a Web experience that is anything more than informational. While the argument might be advanced that they are not commercial sites, Energy E-Comm.com would argue that they should in effect be responsive to their many audiences, which include the utilities for which they have oversight responsibility, the elected officials to whom they answer, and most importantly, the citizens who in the long run fund the commissions and their Web site.”
In ranking the regulatory commission sites, Energy E-Comm.com took into consideration such factors as the site’s strategic content, current state of its technological features and the ability to provide the customer a rewarding Web experience.
“At first glance, you might think that these criteria are not applicable to energy regulatory commissions,” said Abrew. “We argue that any enterprise that provides products or services to a visitor, i.e., customer base, using a Web site needs to take into account the criteria … if that web site is to have a market value. Why else would you bother to develop a Web site if you are not marketing to a ‘customer base’-in this case the many parties interested in regulatory proceedings and their potential impacts.”
Mincom and SCT Announce Integrated Web-enabled Solution for Utilities
As part of the company’s strategy to deliver fully integrated e-business solutions, Mincom Inc. has announced the integration of its business process component set, Ellipse 5.0, formerly MIMS Open Enterprise, with the SCT Banner customer management suite. The solution should be available to utility operations worldwide in May.
“In this age of utility mergers and acquisitions, it is vital to have Internet-enabled back-office operations, such as maintenance and procurement, in addition to having a scalable, integrated system capable of handling millions of customers in ever-changing service territories,” said Brett Roveda, Mincom’s North American operations president.
In March, Mincom introduced AReNA, a business integration framework that the company says provides the Web-architected technology platform necessary for the development of large-scale and enterprise-wide solutions. The SCT Banner integration partnership is an initial payoff of that strategy. SCT’s Banner is a customer relationship management system that uses real-time data to provide immediate billing and payment services, among other features. Ellipse 5.0 is a fully integrated enterprise solution, providing over 1,000 Web-enabled applications for maintenance, repair and operations, materials management, and financial and human resources management.
“These two firms have complementary core strengths, both functionally and geographically,” said Rick Nicholson, vice president of META Group’s Energy Information Strategies division. “The EAI-based integration model is going to be particularly attractive to energy companies that are no longer operating in the vertically integrated business paradigm and that have restructured into decentralized or autonomous lines of business. This partnership is an alternative worthy of consideration.”
Power Quality Product Installed at Seattle Recycling Facility
Mitsubishi Electric Power Products Inc. (MEPPI) has installed and commissioned the first 5 MVA, 4.16 kV-rated Distribution Static Compensator (D-STATCOM) in the United States. The installation at Seattle Irons & Metals, a steel recycling facility, is expected to eliminate voltage flicker in the power grid caused by a 4,000 horsepower shredder motor used at the facility.
“This installation is a milestone in our company’s history,” said Roger Barna, MEPPI president. “D-STATCOM is an important new product to improve electric power quality on the distribution network.”
Mitsubishi Electric has more than 200 D-STATCOM installations in service throughout the world, ranging from .1 to 60 MVA. For voltage flicker applications, the D-STATCOM provides rapid-response compensation to correct for the voltage sag and swell characteristics imposed on the interconnected system. In the case of Seattle Irons & Metals, the D-STATCOM operates at 4.16 kV and provides reliable power quality for both the steel recycling facility and Seattle City Light, the utility which provides power to the plant.
“There has been great interest recently in the North American market for this type of advanced technology,” said Gregory Reed, manager of MEPPI’s power systems division. “As deregulation of the electric utility industry progresses into the next century, we expect to supply the D-STATCOM and other custom power technologies, such as high-speed solid-state switching devices, for numerous power quality applications.”
Smithsonian Honors Con Edison of NY
At a recent ceremony in Washington D.C., the Smithsonian Institution honored Consolidated Edison Company of New York for its development and use of an innovative customer service system.
Intell-A-Check, a Windows-based desktop application in use since 1996, allows Con Edison customers to pay their utility bills without writing or mailing checks. Through the use of Intell-A-Check, customers are able to call Con Edison account representatives and provide their checking account information for account deduction.
The Computerworld Smithsonian Program identifies individuals and organizations whose use of information technology results in positive social, economic or educational change. The utility was among a group of more than 400 winners worldwide.
The award also earned Con Edison a permanent spot in the Research Collection that incorporates information technology innovations since the development and use of Morse Code. The Intell-A-Check system will be included in the Information Age Exhibit at the Smithsonian Institution’s National Museum of American History.
SCE Presents Award to Suppliers
S&C Electric Co. and G&W Electric Co. were among the 28 companies recently presented with gold supplier recognition awards by Southern California Edison (SCE). The companies were recognized for their parts in helping SCE achieve considerable cost savings. S&C Electric provides SCE with high-voltage switching and protection equipment, and G&W Electric provides distribution voltage SF6 load and fault interrupting switchgear for overhead, padmount and vault applications.
In presenting the award, Emiko Banfield, SCE’s shared services vice president, noted that a select group of suppliers have helped support SCE’s ‘strategic sourcing’ initiative, a method of purchasing goods and services that focuses on identifying product redundancy, avoiding unnecessary customization, consolidating suppliers and achieving savings.
Since 1996 when SCE implemented its strategic sourcing plan, the utility has realized total supply chain savings for materials and services of more than 10 percent.
S&C Electric Co. started with a single product-the Liquid Power Fuse, invented in 1909.
G&W Electric Co. has been supplying transmission and distribution voltage electrical equipment to the power industry since 1905.
Consortium Plans Internet Marketplace
A consortium of 15 U.S. electric and gas companies plans this year to launch an Internet marketplace for the purchase of goods and services between the energy industry and its suppliers. The business-to-business exchange will operate as a single portal for purchasing anything from transformers and wire to turbines and equipment repairs. The exchange will be accessible by any company in the energy/utility industry.
The 15 companies involved in the consortium are American Electric Power, Cinergy, Consolidated Edison Inc., Duke Energy, Edison International, Entergy, FirstEnergy Corp., FPL Group, PG&E Corp., Public Service Enterprise Group, Reliant Energy, Sempra Energy, Southern Company, TXU and Unicom.
Through the proposed online marketplace, the consortium intends to streamline purchasing processes, shorten purchase cycles and increase accessibility between buyers and sellers. Initial services of the marketplace will include online proposals, price quotes and auctions.
The consortium expects to establish a company by June to operate the exchange. The operations company at first will be owned by the founding companies, but ultimately is intended to become independent. Pricewaterhouse Coopers will assist in development of the exchange and the selection of the technology provider.
Contract Awards and Extensions
East Midlands Electricity, a division of PowerGen Energy plc in England, has selected QC Data’s Spatial Data Services Division to provide turnkey geospatial data and engineering records management outsourcing services. The contract will run for three years, with an optional two-year extension.
Philadelphia-based PECO Energy Co. has signed a multimillion dollar contract with Intergraph Corp. for deployment of its InService Suite outage management system. PECO will use Intergraph’s FRAMME to create a GIS facilities model that will provide electrical connectivity to the InService system.
MDSI Mobile Data Solutions Inc. has signed a contract with Texas co-op Pedernales Electric Cooperative (PEC) for the implementation of MDSI’s Advantex mobile workforce management system. PEC will use Advantex to replace its paper- and voice-based dispatching systems. The contract covers both software and services.
CES International has been contracted by San Diego Gas and Electric (SDG&E) to enhance power delivery service and reliability for more than 1.2 million utility customers with the deployment of the Centricity operations resource management system. The project calls for an InterSys-based integration to SDG&E’s Enghouse GIS, ACS SCADA, and the CustomerOne CIS application.
Utility software vendor SCT Corp. has signed a contract with Indiana-based Anderson City Utilities (ACU) to implement SCT Synchronization Solutions (Synchro), a web-enabled customer information system built to utilize Microsoft technology.
Northern Virginia Electric Cooperative (NOVEC) has licensed energy e-commerce company Enermetrix.com’s energy exchange to create an online gas and electricity auction marketplace. The marketplace will be used by NOVEC’s commercial and industrial customers.
Alliances, Mergers and Acquisitions
Orcom Solutions Inc. has announced its membership in the international IT research and analyst organization META Group Inc. Orcom’s involvement with META Group focuses on its vertical market Energy Information Strategies Group and its Enterprise Data Center Strategies Group.
Navigant Consulting’s Spatial IT Solutions group has established a business partner relationship with ESRI. The relationship acknowledges Navigant Consulting’s ability to tailor value-added solutions based on ESRI technology.
Siebel Systems Inc. and SPL WorldGroup Inc. have announced an alliance to deliver a solution for large energy distribution companies and retail energy service companies seeking to implement a CIS and ready their call centers for deregulation. Under the alliance, SPL’s CIS PLUS software will be integrated with Siebel’s eEnergy.
Intergraph Corp. and Severn Trent Systems (STS) have announced a strategic business alliance whereby Intergraph’s InService solutions and STS’ STORMS work management, Scheduler resource management and FieldIT mobile work management solutions will be available as pre-integrated components.
Paytrust.com, a service that lets consumers receive, review, pay and organize their bills online, and edocs Inc., a provider of Internet billing and customer management software and services, have announced an alliance. The alliance will allow companies to leverage edocs’ BillDirect Internet billing and customer management platform to deliver electronic bills to consumers using Paytrust.com’s online billing service.
Southern Company Energy Marketing and Internet utility company Utility.com have entered a partnership to provide Southern Company Energy Marketing’s wholesale electricity to Utility.com’s customers via the Internet. Southern Company Energy Marketing also has taken an equity stake in Utility.com, with the right to make an additional investment in subsequent private financings.
USDATA Corp., a global supplier of integrated manufacturing software solutions, and ALSTOM have formed a partnership to develop USDATA’s next generation automation software product. The product will be built for Windows 2000 and based on Microsoft’s Windows DNA platform. USDATA and ALSTOM personnel will develop the product at USDATA’s Richardson, Texas, facility and ALSTOM facilities in Paris, France. A wide variety of target markets will include utilities, manufacturing and infrastructure.
Personnel Changes and Promotions
Utilipro Inc., which provides customer care solutions to North American energy marketers, has named James ‘Andy’ Hopkins as its president. Hopkins was formerly Utilipro’s director of information technology. Neil Stewart, formerly director of information technology operations, has been named chief information officer. Other changes at Utilipro include an approximately 10 percent reduction in workforce.
Enghouse Systems Limited announced that Neil Shafran was appointed executive vice president, corporate development. He will be responsible for executing Enghouse’s new corporate strategy of using mergers and acquisitions to build a diverse information technology company.
Michael J. Chesser, former chairman, CEO and president of Itron Inc., has left Itron to become CEO and president of GPU Energy. LeRoy D. Nosbaum has replaced Chesser as Itron CEO and president.
System Development”-Integration (SD”-I), an IT solutions provider to utilities and municipalities, has named William Herdegen as director of its utilities practice. Prior to joining SD”-I, Herdegen was Commonwealth Edison’s engineering, construction and maintenance vice president.
CES International has named veteran software executive Neal Miller as its chief financial officer. Miller previously was division president of Syntellect Interactive Services, Syntellect Inc.’s hosted services business unit.