By Bob Fesmire
A variety of new market forces are creating unprecedented demand for interval meter data. Billing for larger commercial and industrial customers has always depended on it, for example, but now the demands being placed on meter data processing are outstripping the capacity of energy providers’ legacy systems. At the same time, the many new downstream applications that rely on interval meter data have conspired to make what was once an analytic curiosity into a highly visible strategic asset. As a result, energy providers have begun to adopt meter data processing solutions that offer more throughput, greater flexibility and easier integration with other systems.
Meter Data Everywhere
Meter data, in the case of larger energy customers, is vital to the operations of the supplier for two main reasons: First, it represents the “raw material” from which bill amounts are calculated, and, second, the entire billing process cannot even be begun until the requisite meter data is collected, validated, formatted and otherwise massaged into the shape needed by the billing or customer information system. Additionally, more and more energy customers are being billed on the basis of interval meter data, thus increasing the volume of data passing through the various steps in the process. To complicate matters further, there are now a host of external parties who depend on timely delivery of customer meter data, from bill verification services to other market participants to the provider’s own customers.
Beyond the Monthly Statement
As the primary application for meter data, billing provides an excellent example of just how complex the meter data process has become. Following is a brief list of just some of the actions a billing department is expected to perform that depend on customer data.
- Validation and estimation (V&E). Business rules for V&E in restructured markets are set by market entities, meaning energy providers must be able to implement those rules quickly, without fundamental system modifications.
- Calculation of billing determinants. This is the “core” billing function—creating the line items that appear on the final statement.
- Load shapes for non-interval customers. A given customer may not be equipped with an interval recorder, but still must be billed on the basis of a load shape. To generate this data, the utility must map the customer’s usage to an appropriate load profile that itself must be developed from the interval meter data from similar businesses.
- Market-required calculations. In a restructured market, an energy provider might be required to deliver certain information to market entities that is based on customer usage data. In Ontario, for example, local distribution companies must calculate net system load shape and weighted average price figures to bill non-interval customers.
- Settlements. Participants in restructured markets are required to provide customer data to the market administration entity, such as an independent system operator. This data must also first undergo the V&E required by the market entity for the data to be deemed of “settlement quality.”
- Bill generation. Once the data has been processed through V&E, settlements and other processes, the bill itself still must be created.
- Support of e-billing and energy information services. Many energy providers are giving their customers the opportunity to view and pay bills online, as well as providing other energy information services. The data used for these applications clearly needs to be in agreement with that used for billing. The billing department therefore must support customer-facing applications with the usage data they require.
Some of the foregoing functions may be assigned to different groups within the utility, frequently metering or IS. But when data-related problems arise, any one or all of these areas may be affected. Even when everything runs smoothly, traditional processes simply cannot handle the volumes of customer data now being pumped through the back-office systems of energy providers.
This bottleneck is due in part to the fact that, while energy providers now view meter data as a strategic asset with tremendous potential for adding value to customer relationships, this has not prompted these providers to adopt a comprehensive IT strategy for processing that data. Once again, billing provides an example of how crippling this situation is.
Advanced pricing schemes, and indeed most pricing for commercial and industrial customers, are predicated on advanced metering. While many companies have invested in technologies such as automatic meter reading (AMR), the processing systems that take in the data from such advanced meters cannot support the pricing schemes that the meters make possible. As a consequence, the energy provider’s top customers are billed using labor-intensive, highly error-prone spreadsheet tools, bills go out late, and customers are left to ponder what they must do to get a basic level of service out of their power provider.
Automation is the Key
Perhaps the greatest advancement an energy provider can make in meter data processing is to replace manual processes with automated systems. In virtually every utility organization today, there is simply too much human intervention in the meter data process to meet the increasing demands for customer data. The validation, estimation and editing (VEE) process, for example, often involves an analyst going through customer data point by point, making decisions about the validity of a given interval reading. There are software products on the market now that can make the VEE process virtually hands-free, which can significantly shorten the time it takes to go from raw meter data to validated meter data, and then to the generated bill.
Clearly, the faster customer data can be passed through the VEE process, the sooner it becomes available for billing. But aside from improvements in back-office efficiency, energy providers also must make some changes in how customer data is regarded at an enterprise level. Specifically, they should recognize customer meter data for what it is: a vital component in various aspects of the company’s operations, many of which directly affect the relationship the provider has with its major customers. When a bill arrives late, it already has one strike against it—no matter how informative or penny-accurate it may otherwise be, it’s still late.
A late bill can cause even further erosion of the customer relationship if the information it contains does not match what is available through the utility’s energy information services. Indeed, what could be more frustrating for an energy manager than to make operational plans according to data obtained from the energy provider’s Web site only to find that what appears on the bill is completely different?
The solution is for every downstream application, from billing to online energy information services, to refer to the same source for customer data. When energy providers understand how the various elements of their business are connected through meter data, they will be much more likely to address how their organization handles that data from a strategic standpoint rather than a strictly operational one. When viewed from a strategic level, the need for more automated, more efficient and more flexible meter data systems becomes clear.
Billing Can Lead the Charge
The billing department can help drive the development of an IT strategy for meter data. Because of their high exposure to customers and their ties to the financial health of the company, billing departments can leverage these two constituencies in advocating better IT solutions. More efficient VEE, shorter processing time, greater consistency between downstream applications—all of these are things a billing manager can lobby for convincingly, using customer retention as a point of agreement. Retaining customers means preserving revenue streams, so an IT strategy that has customer retention as its guiding principle is good for the entire organization.
This is not to suggest, however, that the billing manager must wage a lone crusade. To the contrary, he or she should engage the metering department and the information systems groups of the company in a dialog, enlist their support for system improvements, and build a consensus based on improving internal efficiencies as well as customer relationships.
Whether or not a particular market is undergoing deregulation, the fact remains that the energy industry as a whole is experiencing fundamental change. The transformation of customer meter data—from an operational byproduct to a valuable asset used to create new sources of revenue and build stronger relationships with top customers—is a prime example of how this sea change in the industry is affecting the way energy providers do business. Now that meter data has achieved this new level of visibility, these companies must develop IT strategies that address the many requirements of and uses for customer meter data. In the long run, energy providers that recognize the need for such a strategy and rise to meet the challenge will be better equipped to face an ever-changing market than those that do not.
Bob Fesmire (firstname.lastname@example.org) is a marketing manager in ABB’s Utilities division. He writes periodically on information technology, distributed generation and other energy industry issues.