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Case Study Sweden: Energy bill to
energy statement – payment
flexibility
TailorMade in short
• Billing for Telco and Utilities
• Office in Stockholm Sweden and Summit New Jersey
• Modern Holdings Inc.
• Long-term investment since 2005 in Utility offering
• Focus markets
– Scandinavia
– The US
– Some European competitive markets
• Partner strategy
Background within Telco
• Large transaction volumes
• +20 markets and +25 million customers
• Competition and cost efficiency
– Ex. $4 vs. $0.70 per invoice
• Pricing real-time or near real-time
• Flexibility in payment process
– Product strategy – not a consultancy
TailorMades solution offering
• Micro Production Billing
• Smart City Billing
• Smart Billing
• Large Account Billing
• Budget Payment
• Hot Billing
• Pre Paid
• Convergent Invoicing
Sweden electricity facts
• Total consumption 2009, 138.8 TWh
• Consumption per capita 2009, 15 000 kWh
• The distribution system is divided in three levels– Local distribution system
operators DSO (170)
– Regional DSO (3)
– The Swedish national grid
• Approximatly 5.2 milion electricity users connected to the grid
• Approximatly 100 electricity suppliers
Swedish electricity market
Smart meters since 2009
- market challenges
• Increased competition
– 6-12% churn
– Market consolidation in retail business
• Increased transparency in risks for the
consumers
• New business models
• Additional services and bundles
Market trends
• The requirements are:
– monthly readings (<63 Amp)
• There is a shift against hourly reading
• More data is being collected from the meters
• Different kind of home display are being
offered to customers.
• Customer segmentation and converged billing
– Similarities to Texas
Bixia
• Started in 1997
• Energy retail company
– Owned by 9 regional utility companies
– 18 offices in the south and middle of Sweden
– Energy purchase at Nordpool
– Fourth largest in Sweden, 300 000 customers and
turnover sales 3 billion SEK
Utility Account case - Bixia
• Multiple services with different CIS and billing
processes
• Bixia new brand is joint venture focusing on
retail business and added services
• No common customer view
• 8% churn and increasing
Bixia - The new offering
• One bill for all services
• Segmented new utility account offering
– Budget payment plan to utility account
– Account fee
– Interest
• Instalment payments
• Deposit account
Utility account overview
Customer
Self servicePayments
Bank / Direct Debit
Top up through
- Direct debit, optional amount
- Direct payment from bank
- Credit card
- Voucher
Can handle:
Electricity
Heat
Water
Broadband
Telephony
Gas
TV
Service Providers
Etc..
Electricity
Heat , etc
Utility Account
Open or
smallest
amount bill
Utility Account – consumer value
• Even cash-flow
• Improved cost control
• Simplified payment process
– Direct debt payment
• Personalized information and billing process
• Extra service with My Account
Utility Account – Utility company value
• Loyalty tool
– Added services
• New financial revenues improves retail margin
– Interest and account fees
• Segmentation in offerings and collection flow
• Stand-alone product with limited integration with CIS required
• One bill – convergent invoicing solution lower costs
• Simplified administration of certain payment processes
Bixia – Some results
• Churn lowered with more than 50% among
utility account customers
• ROI less than 6 months
– Savings with one billing
– Retail revenue margins up ca 30% for utility
account customers
• Will make all customers Utility Account
customers
Hot Billing case – Storuman Energy
- Energy retail company located in the north of Sweden
- 50 000 electricity customer
- 20 employees
- Only electricity retail customers with low margin
- Volatile market prices increase risks in the retail business with most customers on fixed price contracts
Hot BillingHot BillingMeter valuesMeter values
PricesPrices
Rated
values
Rated
values
Objects
Hot Billing Overview
Energy bill
Transparency for the customers
Jari saved 50 öre/kWh
• Jari in Borås saved 50 öre per kWh in December 2010 as he had selected a new modern electricity contract.
• With ”Elmixen” he saved 951 kronor (approximately $150) that month.
Storuman Energy – Some results
- Over 60% of new customers choose the new
Elmix product
- PR-value and meetings with ministers
- Lowered risk in the energy retail business with
up to 50% on Elmix customers
BILLING SOLUTIONS
THAT ADD
BUSINESS VALUE
