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Enterprise Rating Engines can be a Strategic Asset for Electric Utilities

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Most Utilities have a rating engine within their Customer Information System (CIS) for accurately calculating each customer’s bill based on their monthly electricity usage.  The rating engine, sometimes also referred to as a billing engine, is tightly integrated within the CIS and calculates the monthly bill within the meter to cash cycle.  As the utilities industry experiences massive change, the applications for a rating engine to support processes outside the CIS and outside the meter to cash process are proliferating.  Here are some examples.

Customer Engagement

Improving customer engagement has been a huge focus for utilities in recent years.  Utilities have implemented customer contact preference technologies providing customers the ability to sign up for outage and billing alerts.  Several utilities offer mobile apps for viewing & paying bills as well as displaying usage information.  And many utilities are offering new pricing programs including time-of-use, community solar, and renewable-only electricity plans.

An Enterprise Rating Engine allows utilities to further improve customer engagement by enhancing price transparency.  An Enterprise Rating Engine is a high-speed billing engine capable of calculating revenue-grade bill calculations in real-time and in an ultra-high-speed fashion.    Utilities can augment their customer engagement strategies with an Enterprise Rating Engine and provide the following to their customers:

  • Provide customers with the ability to compare the cost of their historic or projected electricity usage on multiple rate plans (flat vs. timeof-use) via the utility’s myaccountonline or by calling the call center
  • Allow customers to view how their bill will change with rooftop solar panels and community solar on either flat or timeof-use rate plans
  • Allow customers to view how their bill will change with the purchase of an EV, taking into account the EV model, average miles driven per day, and the time of day the customer will charge the EV
  • Enterprise Rating Engines can calculate all customer’s bills nightly, providing customers with the ability to view up to date charges similar to how a bank or credit card app will have up to date charges
  • Provide customers with an optional prepay billing plan
  • Bill alerts based on price vs. only usage
  • Future bill estimates

Enterprise Rating Engines can enhance customer engagement by allowing utilities to advise more specifically and more individually how each customer’s bill will be affected by the many choices that consumers now have regarding electricity.

Rate Design & Marketing

Utilities can also use an Enterprise Rating Engine when designing and marketing new rate plans.  Enterprise Rating Engines have the ability to calculate hundreds of millions of bills in hours.  With this power, utilities can run ‘what-if scenarios’ when developing new rates.  A potential new rate plan, or multiple potential rate plans, can be calculated over the utility’s entire customer base, using each customer’s historic or projected load.  This allows the utility to study how a potential new rate plan will affect each individual customer as well as each class of customer.

When a new rate plan has been selected, the same results can be used for rate education and marketing.  This can be particularly useful when moving to time-of-use rate plans.  Every single customer’s bill can be simulated, based on the individual customer’s load profile, identifying which customers will experience a bill increase, and by how much, and which customers will experience a bill decrease, and by how much.  With this information, the utility can proactively advise customers how their bill is going to change and how much usage the customer should change from peak to off-peak to realize time-of-use rate savings.

Finance

An Enterprise Rating Engine can also be strategic for finance.  With the enterprise rating engine capable of calculating every customer’s bill overnight, unbilled revenue can now be calculated daily, providing a clearer financial picture for the utility finance executives.

With the numerous applications of an Enterprise Rating Engine to improve customer engagement and financial clarity, an Enterprise Rating Engine can be a real and powerful strategic asset. 

Rob Girvan's picture

Thank Rob for the Post!

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Discussions

Matt Chester's picture
Matt Chester on Mar 9, 2020 9:31 pm GMT

When such tools are integrated, what does the process of educating customers end up looking like? I have to imagine without buy-in and appreciation from an informed customer base, these measures aren't very useful

James Riley's picture
James Riley on Mar 10, 2020 2:16 am GMT

Hello Matt.

Very thought provoking question that you raise. Some quick thoughts on my part as follows...

Marketing and Communication - unlike Wayne's World just because you build it doesn't mean they will come!!! If a tool like this can emppwer customers to make informed decisions then you need to market it to them effectively to encourage adoption.

Keep it Simple - just because the tool is capable of doing lots of very complicated calculations for the customer doesn't mean the user experience can be complicated. Quite the opposite, use the intelligence in the back-end to guide the customer towards simple decisions that will have the biggest impact for them.

Don't Call Us, We'll Call You - with a tool like this a utility could simulate the impact of different rate options for all customers and proactively reach out to those most likely to benefit from a change first. In my dream world utilities would be able to manage the customer's rate for them and automatically keep them on the best rate for the - a bit like we all wish our cellphone provider would.

Matt Chester's picture
Matt Chester on Mar 10, 2020 11:02 am GMT

Don't Call Us, We'll Call You - with a tool like this a utility could simulate the impact of different rate options for all customers and proactively reach out to those most likely to benefit from a change first. In my dream world utilities would be able to manage the customer's rate for them and automatically keep them on the best rate for the - a bit like we all wish our cellphone provider would.

This one would be amazing-- sometimes there are utilities that are in PR firestorms and people lose their faith in the utility and get frustrated because they don't have the option to switch to another provider like they could for their cell phone. But that kind of good faith effort would be universally welcome and could help to reframe that relationship

James Riley's picture
James Riley on Mar 10, 2020 2:10 am GMT

Very interesting article Rob. Thank you.

What strikes me if the increased complexity we are asking customers to deal with i.e. Time of Use Rates, Net Metering, Demand Response Events, Energy Efficeincy Programs etc.

I can see real benefit if an enterprise rating engine, one that can efficiently and accurately simulate the financial outcome for a customer of multiple factors, is becoming almost essential to help empower customers without overwhelming them with all that complexity.

Rob Girvan's picture
Rob Girvan on Mar 30, 2020 7:58 pm GMT

Thanks James.

Les Campbell's picture
Les Campbell on May 21, 2020 1:25 pm GMT

Is this type of tool available now? It seems like this would be a request to our CCB platform to integrate our billing data to run scenarios?

Rob Girvan's picture
Rob Girvan on May 21, 2020 4:54 pm GMT

Hi Les - Yes it is available and that is a primary use case - to run scenarios or 'what if analysis' related to numerous topics such as rates, bill impact, revenue planning to name a few.  I can be reached at rob@gridx.com for more discussion.

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