Year 2000 compliance prompted PPL Electric Utility Corp. to investigate ways to expand its remittance processing capabilities and improve customer service. The utility company, located in Allentown, Pa., found that the combination of image-based remittance processing and rapid mail extraction dramatically improved productivity and reduced costs for its payment processing operations.
PPL processes an average of 48,000 customer remittance transactions daily, with peak volumes reaching as high as 100,000 per day. The processing mix includes 80 percent single payments, 18 percent multiple payments and two percent payments with no coupons. About 10 percent of this volume is remittance processing for two affiliated companies, PPL EnergyPlus, an unregulated electric energy supplier, and PPL Gas Utilities Corp., a natural gas distributor. The company anticipates its transaction volume to increase by two to four percent over the next two years.
PPL was looking for ways to maintain its high level of customer service while controlling costs. This led the company to make a strategic investment in a new image-based remittance processing system Wausau Financial Systems (WFS). At the same time, PPL also saw great value in improving the mail extraction process and had already planned to purchase an OPEX 150 high-speed unit for this purpose.
“Our goal was to position PPL as a state-of-the-art remittance processing shop that would serve both itself and other organizations well into the future,” said Jim Pennington, treasury operations manager for PPL. “At the same time, we needed to control costs. The combination of ImageRPS and the OPEX 150, along with the excellent support provided by Wausau Financial Systems, enabled us to achieve both.”
By integrating ImageRPS with the OPEX System 150, PPL can take payments from sealed envelopes to stored images with no manual intervention. Payments are processed quickly and accurately, speeding deposits and providing customer service representatives with quick access to check images when responding to customer inquiries.
Installation of ImageRPS took about two weeks. Pennington was especially impressed with the smooth integration between ImageRPS and the OPEX 150. “We were one of the first companies in the country to pass images from the OPEX 150 to ImageRPS, and we were a pilot program for grayscale imaging. Wausau handled the integration very efficiently and the system worked extremely well from the beginning.”
The original project specification submitted to WFS did not include the unusual situation of remittances made through several regional PPL bill payment centers where customers can pay their electric bills using cash. Each center submits to PPL a single check with perhaps hundreds of stubs. Although ImageRPS handles multiple payments, it was not originally designed for this extreme ratio. However, the system was modified to meet PPL’s special requirement.
Another unusual requirement arose when some of the bill payment centers began transmitting payments electroni-cally instead of using physical checks. This time, PPL ended up with hundreds of stubs but no checks. WFS immediately created a “dummy check” that allowed the system to incorporate these remittances and maintain productivity
With limited notice, the Pennsylvania Public Utilities Commission informed PPL that the company needed to send a Customer Choice Sign-up Card to each of its 1.3 million customers, allowing them to participate in deregulation by picking a different energy supplier. After PPL designed the card and envelope, WFS had only a matter of weeks to program ImageRPS and work with OPEX to bring the project online. “We made our deadline,” Pennington said.
The decision to implement ImageRPS and the OPEX 150 delivered tremendous benefits to PPL. Most important was the expansion of processing capabilities while achieving a 60 percent savings in current and anticipated labor costs. This savings was achieved primarily through automated mail extraction, improved quality of the grayscale images and the accuracy of ImageRPS’ optical character recognition (OCR). Despite extreme variations in handwriting styles, ImageRPS is currently achieving an impressive CAR accuracy rate of approximately 80 percent, which means most remittances are processed without any manual keying.
Customer service capabilities were dramatically improved by burning CDs daily and eliminating microfiche. Customer representatives can now find information almost instantaneously. Image archiving also eliminated the need to store check stubs, saving PPL approximately 1,600 cubic feet of storage space.
“Overall, the new system is extremely robust and flexible, allowing us to serve our affiliated companies and a variety of internal needs,” Pennington said. For example, PPL uses the system to tabulate the proxy votes of shareholders. PPL also has plans to implement two-sided image processing for the two-sided authorization form of its direct debit program. Finally, the system’s increased capacity has allowed PPL to beginning offering remittance processing to other organizations.