Smart bills – a smart way to engage customers


Christophe Dromacque,
Head of Research,
London, U.K. and Helsinki, Finland — (METERING.COM) — August 13, 2013

Smart bills that are sent to an entire customer base can be a cost efficient and effective way to engage with customers, promote energy efficiency and foster conservation behavior.

In the new Case study on innovative smart billing for household consumers, which was prepared for the World Energy Council (WEC) and ADEME by VaasaETT Global Energy Think Tank, smart bills were found to be responsible for reducing household electricity consumption by between 1.1% and 2.7% and gas consumption by between 2.2% and 2.8%, while at the same time proving cost effective compared to other feedback and energy efficiency programs.

In the study, smart bills were assessed from eight different geographies – California (U.S.A.), Ireland, Sweden, Victoria (Australia), Abu Dhabi (UAE), Chile, South Africa, and Hong Kong (PRC).

The study found that just a few simple features can greatly improve traditional bills and provide useful actionable insight to household consumers. Further while quality and insight are greatly improved by the data granularity enabled by advanced metering infrastructure systems, enhanced bills can also be implemented with traditional meter data, as shown by the case studies in Chile, Abu Dhabi, South Africa and Hong Kong.

Smart bills are also most effective when they are part of a comprehensive education and feedback package. The most advanced and arguably the best cases of smart bills are to be found in countries with both enhancing technology and supporting regulation, as for example in California and Ireland.

 “We now know how to reduce consumption through more innovative billing,” commented VaasaETT’s head of research, Christophe Dromacque. “Customers need more from their energy bills than most utilities currently give them. At a time of increasing energy bills and financial austerity, customers’ trust in energy companies will increasingly depend on bills that help customers to save on their energy costs.”

Policy recommendations are as follows:

  • Accurate billing frequency should be monthly whenever feasible in order to increase awareness of energy consumption and enable consumers to better link the results of their behavior with their energy consumption and expenditures.
  • The specific design of the bills should be left to market forces and allow for innovation and creativity, but some building blocks should be made mandatory (if applicable). These include: (i) normative energy use comparison, (ii) tips and advice to reduce energy usage or power demand (iii) tips and advice to benefit from TOU or other types of dynamic tariffs, (iv) historical consumption data in order to track progress, (v) in case energy is subsidized real cost and real bill size, (vi) responsibility for the different elements of the bill (retailer, DSO, state) and (vii) pollutant emission associated with billed energy consumption.
  • In countries upgrading or contemplate upgrading their metering to smart metering, supporting regulation should ensure that feedback and education requirements (e.g. through smart billing but also through other interactive channels) be an integral part of any smart meter or residential dynamic pricing policy package to ensure that all consumers are informed and are able to benefit financially and otherwise.