A Sidecar Solution for Complex Billing

May 11, 2020

Complex rates can be designed to match true energy costs with the amount the customer is billed. This can have tremendous benefits in reducing overall customer bills and flattening the load curve. Realizing the benefits of complex rates requires enabling technologies, such as smart meters, smart thermostats and other smart devices. It also requires a billing and rating engine capable of calculating the complex rates. 

The following statistics show that enabling technologies are rapidly being put in place.

“Deployments are estimated to reach 98 million smart meters by the end of 2019 and 107 million by year-end 2020.” – edisonfoundation.net

“Growth numbers in connected home as a category are strong; McKinsey found a compound annual growth rate of 31% from 2015 to 2017, and notes that “this is expected to continue in the years to come.” – mckinsey.com

With smart meters and smart devices available, the final piece is a billing engine capable of calculating advanced rates.  Billing calculations are typically performed by the utility’s customer information system (CIS), which also performs credit & collections, work management functions, premise and meter management, call center support and other functions.  Replacing or upgrading a CIS can be a costly and lengthy endeavor.  TMG Consulting reports that replacing a CIS can cost between $59 and $105 per meter, meaning that replacing or upgrading a CIS only to perform advanced billing objectives is not cost effective.

A More Cost-Effective Approach

An Enterprise Rating Engine is a much more cost effective solution and provides numerous additional benefits.  An Enterprise Rating Engine works in conjunction with a CIS to provide advanced bill calculations.  The CIS remains responsible for the overall coordination of the meter to cash cycle and supporting other functions.  For advanced billing calculations, the CIS relies on the Enterprise Rating Engine for the complex rate calculations.  Instead of replacing or upgrading the entire CIS, adopting an Enterprise Rating Engine can cost up to 90% less per meter.  This approach can substantially reduce the cost of adopting complex rates to support time varying, demand response, demand charge, NEM and other advanced rate plans.

In addition, Enterprise Rating Engines supports the entire utility product lifecycle process, including configure-price-quote for utilities, enhancing price transparency for customers and increasing customer satisfaction.

“Most utilities are missing the opportunity offered by smart meters to help customers conserve energy, according to new research from the American Council for an Energy-Efficient Economy (ACEEE).” –utilitydive.com

Adopting an Enterprise Rating Engine can help utilities faster realize the benefits of smart meters and smart in-home devices.