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CONFIDENTIAL ©2012 Energy Services Group
People
Process
Technology
Billing, Transaction Management, and Wholesale Services for the Energy Industry
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U.S. Retail Energy Industry Technology Utilization
Agenda
• Retail Electric Market Entity Interdependence
• PPS Key Success Factors & Technology Attributes
• PPS Data & Business Processes
• PPS Technology Platform & Approaches
• PPS Technology Case Studies
• U.S PPS Technology Lessons Learned
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Retail Electric Market Entity Interdependence
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Electric Market Interdependency Entity Types
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Integration Integration
Integration Integration
Business Processes
Business Processes
Business Processes
Business Processes
Data
Data Data
Data
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• Ensure the reliability of the grid by coordinating and directing transmission,
generation and demand response in its region
• Operate a competitive wholesale electricity market
• Plan generation and transmission expansion to ensure reliability
• Provide real-time information to all wholesale market participants
Independent System Operators
• Own, plan, construct, operate, and maintain the distribution system and provide
distribution services
• Own, install, and maintain the metering infrastructure
• Balance demand and supply at distribution system level
• Coordinate with the ISO/RTO
• Act as supplier of last resort for customers
• Transact with PPSs via market rules
• Based on market rules, offer PPS services: - Purchase of Receivables - Billing Services - Customer data
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Utility Role in Deregulation
• Sell electricity to end use customers
• Buy and sell electricity in wholesale markets
• Deliver electricity to utilities for redistribution to customers
• May use utility services such as billing and customer support
• May own generation assets
• May bundle other services such as energy efficiency, solar, demand response with the energy commodity
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PPS Role in Deregulation
PPS Customers
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Large Commercial & Industrial Small Commercial Residential
• Very large energy consumers i.e. manufacturing
• Interval data • Unique pricing and
service requirements
• U.S. Market share approximately 35% by consumption*, 1% by account volume
• Small and mid sized businesses i.e. restaurants or stores
• Considered closer to residential type for pricing
• U.S. Market share approximately 50% by consumption*, 9% by account volume
• Residential homes and surrounding dwellings
• Also known as mass market customers
• U.S. Market share approximately 15% by consumption*, 90% by account volume
* U.S. Market share is total consumption both regulated and unregulated markets
PPS Key Success Factors & Technology Attributes
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To Achieve Success, a PPS must…
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Effectively and efficiently acquire
customers
Procure and price energy and
manage associated risks
Efficiently operate back office
systems
Success Factor Technology Attributes
Effectively and
efficiently acquire customers
Procure and price energy and manage
associated risks
Efficiently operate back office systems
• Telemarketing • Sales channels • Direct mail • Direct sales • Multi-level marketing
• Pricing • Forecasting • Procurement • Scheduling • Risk management • Settlement
• Enrollment • Customer data • Billing • Accounting • Customer service • Collections
P P S T e c h n o l o g y P l a t f o r m 11
Customer Acquisition Technology
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Effectively and efficiently acquire
customers
Procure and Price energy and
manage associated risks
Efficiently operate back office systems
• Telemarketing
• Sales channels • Direct mail • Direct sales • Multi-level marketing
• Call center system • Print vendor mgmt. and fulfillment • Sales channel portal • CRM • Contract management • Pre-enrollment transaction processing • Pricing and quote management
Data Management Integration
Business Processes
Energy & Risk Management Technology
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Effectively and efficiently acquire
customers
Procure energy and manage
associated risks
Efficiently operate back office
systems
•Wholesale market interface
• Pricing and quote management • Supply & demand forecasting • Supply contract management • Scheduling • ISO settlement and payments • Trading and risk management • Data analytics
• Pricing • Forecasting • Procurement • Scheduling • Risk management • Settlement
Data Management Integration
Business Processes
Back Office Technology
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Effectively and efficiently acquire
customers
Procure energy and manage
associated risks
Efficiently operate back office
systems
• Utility enrollment interface
• Utility data exchange • Billing system • Accounting & financial management • Customer service management • Collections • Process and exception management
• Enrollment • Customer data • Billing • Accounting • Customer service • Collections
Data Management Integration
Business Processes
PPS Data & Business Processes
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Data
Data Data
Data
Think of PPS as Data Processing Co.
• Utility Enrollment Interface
• Utility Data Exchange
• Billing System
• Accounting & Financial Mgmt.
• Customer Service Mgmt.
• Collections
• Process and Exception
Management
• Wholesale Market Interface
• Pricing and Quote
Management
• Supply & Demand Forecasting
• Supply Contract Mgmt.
• Scheduling
• ISO Settlement and Payments
• Trading and Risk Management
• Data Analytics
Call Center System, Print Vendor Management,
CRM Sales Channel Portal, Contract Management,
Price & Quote Mgmt., Pre-Enrollment Transaction Process
P P S T e c h n o l o g y P l a t f o r m
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Critical Technology Success Factor:
Data
Data Data
Data
Match Data Processing to Business Processes
S y s t e m s I n t e g r a t i o n 18
PPS Has 3 Primary Points of Data
& Business Process Interface
Pricing
Customer Acquisition
Customer Service
Billing
Enroll
Customer Data
Demand Forecasting
Scheduling
Supply & Price
Supply
Forecasting
Scheduling
Settlement
Wholesale Market Utility Customer
B u s i n e s s P r o c e s s e s
D a t a M a n a g e m e n t
Data/Business Process - Sales Quote
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3. Send Historical usage
Offe
r
Acce
pt
1. Request Quote
2. Request Historical Usage
Send Historical usage 4. Price Quote Response
Data/Business Process - Utility
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Enrollment R 1) 1. 1. 1.Enrollment Request
equest 2. Enrollment Accept
3.Usage to be Charged Recurring
Recurring
Recurring
4. B
ill
5. P
ay Recurring
Recurring
3. Utility Charges
6. Payment
Data/Business Process - Wholesale
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Daily Schedules
Settlement Data
Invoices Recurring
Recurring
Recurring
Offe
r
Acc
ept
Market/Pricing Data
Payments
Recurring
Recurring
Data/Business Process - Customer
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Product Offer
Acceptance
Recurring
Recurring
Enro
ll
Acc
ept
Payments
Customer Service
Billing Recurring
Usa
ge
• 6 Different Wholesale Markets – Hourly, Daily Pricing & Scheduling – All with Different Data Exchange Requirements
• 140 Utilities with Retail Markets – All with Different Data Exchange Requirements – 4 Different Billing Methods
• Rate Ready – Bill Ready – PPS Billed – Dual
• Millions of Customers – Industrial, Commercial, Residential, Institutional – 1,000s of load profiles
• 40+ Types of Customer Products • 2,000 + Sales Channels
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U.S. PPS Points of Interface
PPS Technology Platform & Approaches
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Customer Service
Customer Acquisition Operations Supply
Energy Accounting Management
Customer Portal
Pricing
Commission Mgmt. Deal Capture Supply
Settlement Dashboard
Bill Data Mgmt.
Broker Portal
Collections
CRM Kit
Broker App
Scheduling Demand Settlement
Risk Mgmt.
KPI Mgmt.
Forecasting
Analytics
Credit Mgmt.
AR/AP
Tax Mgmt. Utility Data Mgmt.
Compliance
IT Administrator
Document Management
Application Data Warehouse and System Integration
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PPS Technology Platform View
External Data Exchange & Management
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U.S. PPS Technology Approaches
1. Build Systems & Data Exchange In House
2. Outsource Systems & Data Exchange to SAaS Provider • Typically priced on unit fee basis (per customer, supply volume, etc.)
3. Buy Systems & Outsource Data Exchange to SAaS • Typically license software from a variety of vendors • Typically only one data exchange vendor • Requires extensive system integration
Approach 1
Approach 3
Approach 2
PPS Technology Case Studies
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PPS Case Study A: Pricing & Sales Challenge: • Large PPS focused on Commercial and Industrial accounts, sold exclusively
through sales channels • Received 400 quote requests per day for complex pricing • Internal staff of 4 could not process volume – resulting in lost customer sales
and unhappy sales channels Solution: • Automate quote data/business processes
– Retrieve utility historical usage automatically – Update price curves from supply group through system integration – Auto fill quote forms and contracts – Track quotes, channel source and success metrics
Results: • Price quote turnaround time went from days to 2 hours • Contract closure rate increased by 13% immediately • Reduced staff to 1 • Improved controls and reporting
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PPS Case Study B: Customer Retention
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Challenge: • Large PPS focused on residential customers with 1,000,000 customers in 70+
different utility markets • Losing 1,000s customers/week to competing PPSs
– Customer Service could not handle volume for retention program
Solution: • Automate retention process to “win back” customers • Auto alerts created from dropped account to spread queue to win back team • Automatic re-enrollment of accounts without starting new
Results: • Win back rates up to 30% immediately • Use of technology improved business process and required fewer people to
oversee and manage process
PPS Case Study C: Load Forecasting
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Challenge: • Large PPS focused on residential customers with 300,000 customers in 50+
different utility markets • Managing daily demand forecasting process via spreadsheets
– Manual processes, potential for failure, high resource risks, no controls
Solution: • Automate forecasting process • Remove manual processes, controls in place to ensure scheduling • Management reporting
Results: • Far lower risk of process failure, enhanced integration • Use of technology improved business process and required fewer people to
oversee and manage process • Allowed resources to focus on enhancing forecasting methodologies
U.S. PPS Technology Lessons Learned
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U.S. PPS Technology Lessons Learned
1. PPS business is data and business process intensive
2. Superior technology and automation drives success
3. Master the 3 primary components of success
4. Design from the start to scale your operations
5. There is no one technology source or solution that addresses all business
process requirements, be prepared to integrate and manage disparate
systems and vendors
6. Carefully consider the advantages and disadvantages of out-sourcing vs.
in-sourcing
7. Continuously improve operational efficiencies
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