Metering, billing and customer care


Utility industry executives have a lot to keep them awake at night. Their companies operate in an ever-changing marketplace and are subject to constant scrutiny by shareholders, the public and government regulators. New technology is not only reshaping the energy market and how executives operate their businesses but it is also posing complex cyber-security threats and limitless choices for operational improvement. And let’s not forget, fuel costs are soaring.

A new study by Platts and Capgemini surveyed more than 120 senior executives at US and Canadian utility companies to identify and then rank the top issues facing these leaders. It found that regulation, infrastructure investments and the risks associated with volatile natural gas prices are keeping industry executives from enjoying a good night’s sleep. Of vital interest to readers of Smart Energy International, the executives also indicated their concerns about billing, metering and customer care. While none were top issues, they all ranked high enough to deserve individual attention and are the focus of this article.

About the study and high-level findings

The Platts/Capgemini Utilities Executive Study is different than most. Instead of seeding issues and concerns for preordained reactions, the study was structured in a fashion that would be more organic, to bubble up issues without goading or prompting. In Phase I, researchers conducted open-ended telephone interviews with 33 utility executives to uncover their thoughts about company and industry-wide issues, as well as the future of the energy industry. This information was then used to design Phase II, an online survey distributed to more than 90 chief executive officers, presidents and senior-level executives at leading US and Canadian utility companies.

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From that data, researchers determined that executives expect the next five years to require increased reliance on information management, a continued focus on workforce management issues, increased use of renewable energy and a significant increase in risk management activities. Executives also believe their industry will become more accepting of the use of outsourcing for functions such as inventory management, call centres and customer support, billing, information technology and metering. However, they say companies will continue to manage distribution, generation and financial business functions in-house.


With regards to specific findings on metering, the study revealed that executives rank advanced metering infrastructure (AMI) as their number one ‘new technology’ interest. Demand response and smart grid technology followed in second and third place, respectively (Figure 1). Indeed, the overwhelming interest in AMI is a telling indicator of where the industry is today. After countless pilot projects for automated meter reading systems, utilities have gone back to the drawing boards, issuing RFPs for new thoughts and approaches on these technology advances.

Over the past three years some of the largest utilities in North America have embarked on AMI initiatives, demonstrating that technology advances have finally made such large investments feasible. Now the additional ‘soft’ benefits can be quantified and rolled into a positive business case. As we see it, utilities view the value in AMI as a means to improve customer service, enable demand response, improve reliability and serve as a critical first step toward addressing the limitations of today’s grid design. And indeed AMI, properly implemented, will enable all those objectives. But today’s utility must take a more comprehensive view of AMI. It’s not just about technology – or at least it shouldn’t be. Instead, AMI should be more about the role technology plays in enabling utilities to adapt to rapidly changing markets and stakeholder pressures today and well into the future.

An organisation must not only be good at delivering utility industry expectations but also do its best to take advantage of creative financing while developing financially sound regulatory strategies that make AMI a smart business decision. Defining a long-term vision now is crucial to future success.


The study also indicated that billing systems are an important concern (second only to fears about cyber-security). When coupled with executives’ keen interest in AMI, it stands to reason that billing would be a highly ranked topic in the information management category of the study. Traditionally, billing has been an embedded function within customer information systems (CIS). In that model, updating billing functions to incorporate tariff changes has been costly and time consuming. But that was yesterday.

Going forward, billing applications will need to be modular and separate from CIS systems, infinitely more flexible and user-friendly, and capable of dealing with ever more complex billing algorithms and orchestration parameters. Flexibility is key: tomorrow’s systems must meet the requirements of traditional, fully regulated distribution companies and those of participants in deregulated retail markets. The fully regulated companies have end-to-end responsibilities, whereas the separated companies are responsible for distribution, metering and retail functions. Each of these companies will have billing functions associated with the same set of consumers, premises and meters.

Combine market structure options with innovative rate plans – such as market-based or time-of-use rates that can be coupled with conservation credits or buy/sell plans for customers with local generation capabilities – and it is easy to see why executives are interested in billing systems. This interest displays executives’ keen insight into the possibilities for new forms of billing structures, as the new procedures are easily configurable, allowing utilities to respond quickly to changing market demands.

Customer care and information needs

The communications network implemented to support AMI can also be leveraged to provide new value-added products and services to end customers. Determining the right combination of offerings, and the pricing for specific market segments, is the challenge. Utility executives placed advances in customer relationship management (CRM) systems as their sixth topic of concern in the information management section of the study. Today it is clear that customer service is about much more than the traditional activities of scheduling service calls, outage restoration and accurate billing.

In order to better satisfy more demanding customer expectations and take full advantage of new revenue opportunities, utilities need to provide more information to customers. It is important for utilities to become more familiar with the needs and expectations of their customers – and cater to their individual preferences and concerns, the manner in which they want to interact with the utility, and usage and payment patterns.

Customers will want more information about environmental stewardship as well as access to information about their account, their use of electricity and its cost. This reflects the school of thought that if you provide customers with near realtime information on their energy consumption patterns and energy costs over the Internet or in their homes, they will take actions to change their energy consumption patterns to reduce their energy costs and conserve. AMI serves as the vehicle by which these advances in expectations can become a reality. Indeed, regulators in some competitive retail markets are already mandating that utilities provide this information to consumers.

Once consumption and cost information is available to consumers, the next step will be to actively engage customers in the demand management process. Utilities will establish demand response programmes that pay consumers for loads that can be controlled during peak conditions. This type of active demand response has benefits for consumers, utilities and system operators. Consumers can significantly reduce energy use once they are provided with more information. Utilities can use this dispatchable demand response to offset the building of new peak load generating capacity, thereby reducing environmental impacts. By making such information accessible, system operators can better manage reliability and the volatility of market prices.

Utilities can find in their legacy CIS systems some of the information needed to develop the right mix of new products and services for customers. But truly, some must be obtained from data sources outside the utility. Legacy CIS systems were not designed to collect, compile, analyse and present this information to marketing, sales or service professionals. But who can argue that it would do anything other than enable them to improve the way they develop and sell new products and services? The ultimate goal would be to drive top line growth as well as improve service levels and customer satisfaction.

Views for the future

If nothing else, the first Platts/Capgemini Utilities Executive Study demonstrated that the industry is extremely focused on the future. Despite the day-to-day headaches of regulation, fuel cost volatility and responsiveness to shareholder and stakeholder concerns, today’s executives are concerned about the utility landscape of tomorrow. They understand that the industry is undergoing a transformation, brought on by advances in technology. In the future, large volumes of near real-time data and more pervasive automation will be the lifeblood of the industry. Markets, market participants and consumers alike will rely more heavily on actionable data. Creative business models and business cases will emerge to fund investments in AMI, distribution grid, billing systems and CRM infrastructure.

While the utility sector is often viewed as backward thinking and resistant to change, the results of this first survey provide clear evidence that the sector is, to the contrary, extremely forward thinking. By default the utility industry needs to focus on the challenges present today, but it’s clear that this is being done successfully, while also making the investments required for a solid groundwork for the future.