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COVID-19 and Daily Bill Calculations

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Rob Girvan's picture
Individual Contributor self

20+ years in Enterprise Software Applications in the Energy Industry, including ERP, Meter to Cash, CRM, Customer Engagement.

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  • Apr 8, 2020 12:15 pm GMT
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COVID-19 has changed the financial outlook for utilities virtually overnight.

  • The coronavirus economic freeze could cost 47 million jobs and send the unemployment rate past 32%, according to St. Louis Fed projections. – cnbc.com
  • On March 30th, Forbes reported that the New York power grid was experiencing a 7% reduction in load.

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Combining the reality of much higher unemployment and an unexpected substantial load decrease means utilities will have lower revenues and an increased challenge in collecting revenue.  Applying daily bill calculations provides a dual benefit.  Daily bill calculations can help customers better plan energy usage and provide utilities with transparency regarding the amount of electricity they have sold but not yet billed.  Daily bill calculations provide customers with daily account balances, much like banks and credit card companies provide daily account balances.

For Utilities with smart meters, which measure usage in 15-minute increments, it may seem that Utilities would have systems in place capable of calculating account balances daily.  However, even utilities with smart meters do not have accurate daily bill calculations.

  • The customer information systems (CIS), the systems responsible for calculating the customer’s bill, were originally set up to calculate customer’s bills once a month, the generally accepted timeframe for sending bills and requesting payment.
  • In addition, the computing power available to CIS systems were sized based on the requirement of calculating bills once per month.
  • Also, the CIS has a long list of other responsibilities, in addition to bill calculation.  The CIS runs the collections and dunning process, issues and manages work-orders, and provides support to the customer service agents fielding customer calls.

In short, the current CIS billing engine was not designed for daily billing.  Reconfiguring it to do so is neither feasible nor cost effective.  In addition, it can put critical CIS functions such as collecting revenue, at risk, by over taxing the CIS system.

To perform daily bill calculations, utilities can employ an Enterprise Rating Engine.  Enterprise Rating Engines are separate but integrated with the Utility CIS billing engine.  They are calibrated with the CIS so bill calculations match.  The Enterprise Rating Engine can calculate every customer’s bill nightly, making bill-to-date calculations available to customers allowing customers to better manage their electricity usage.  The Enterprise Rating Engine can calculate unbilled revenue nightly as well, providing utilities with more transparent financial information for planning in these times of vastly changing consumption, revenue, and increased collections risk.

Regarding the COVID-19 crisis, “Don’t just consider what your brand will want to communicate. Consider questions customers will have.” – gartner.com  For customers affected by unprecedented unemployment and increased electricity consumption while staying at home, daily bill updates will be at the top of the list.

 

In a PWC survey on March 25th, 64% of Utility Executives included Financial Impact as a top 3 COVID-19 concern, including ‘estimates inherent in financial reporting’.  With daily accurate unbilled revenue calculations, utility executives have another key piece of information to better manage their businesses.

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Thank Rob for the Post!
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Matt Chester's picture
Matt Chester on Apr 8, 2020

Daily bill calculations can help customers better plan energy usage

Makes me think-- will customers who had been locked into variable rate plans perhaps be able to adjust to standard rate plans to help them with planning during these times? 

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