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Issue link: https://fhpublishing.uberflip.com/i/726810
UTILITY WEEK | 16TH - 22ND SEPTEMBER 2016 | 29 Customers 2) the utility company uses a third party, vir- tually 'off the shelf ' soware. The latter route tends to be favoured by utilities because it's non-intrusive, inexpen- sive and quick to deploy. The customer will usually receive the email message into their monitoring and targeting (M&T) soware, which will auto- matically process it. M&T systems are com- monly used by most multi-site organisations to check bills, detect energy waste and to build a database in support of many compli- ance activities, such as the Carbon Reduction Commitment. Aer validating the bills, the soware usually sends a file with reduced, but specifi- cally defined information, to finance where it is loaded directly into the accounts payable system for payment – usually by BACS or direct debit. It is customary that the full EDI 'parent' bill amount is paid and any incor- rect 'child' bills that the customer identifies are cancelled and rebilled in the next billing cycle. Very occasionally a customer may stipu- late that they want to pay only bills that are 100 per cent correct. However, this leads to complications from an HMRC point of view. The customer can protect themselves in their terms and conditions by rejecting the whole consolidated bill if 'x' per cent are found to be incorrect and ask for a correct consoli- dated bill to be sent. Although it's somewhat counter-intuitive to pay a bill where some individual bills are known to be incorrect, the alternative is fraught with problems. So what are multi-site organisations likely to be stipulating in their tenders? The four main elements, which are impor- tant to include in tender documentation so both parties understand and agree their obli- gation are: • EDI message, operating procedures and protocols; • Visibility of charges; • Full cancel, re-invoice; • Change control procedures. Slow progress in water billing The problem with water billing is that it hasn't moved forward over the past 20 years. When there is a monopoly supplier, isn't it supposed to be the regulator who protects the interests of the consumer? Currently, only Yorkshire Water can pro- vide an EDI billing capability. Seven water companies provide CSV files and the rest paper billing. Of the seven, all are in differ- ent formats, only one has any change control procedures, only half have a full cancel and rebill capability and the visibility of charges is mixed. It seems likely that the new Kelda Water Services Retail (Yorkshire Water) will pro- vide EDI billing; Business Stream and Sev- ern Trent will have a capability in the third quarter of 2016; as would have Thames Water before it withdrew from the market. Water Plus we believe is committed, and others we know are likely to follow suit. Interestingly, Welsh Water, which will not be part of the competitive market in 2017, may consider implementing EDI billing TABLE 1: COMPANIES THAT ALREADY PROVIDE ELECTRONIC DATA INTERCHANGE INVOICING Utility company Electricity Gas Water Centrica ✓ ✓ Corona Energy ✓ Dong Energy ✓ ✓ EON ✓ ✓ EDF Energy ✓ Engie ✓ ✓ Haven Power ✓ Mobile Gas ✓ Npower ✓ ✓ Opus Energy ✓ Scottish and Southern ✓ ✓ Scottish Power ✓ Smartest Energy ✓ Total ✓ ✓ Yorkshire Water ✓ 1.2m Number of eligible businesses and other non-household customers. £200m A competitive water market is expected to deliver more than £200m of benefit to the UK economy. £200,000 Think tank Policy Exchange says one business customer who receives over 4,000 paper bills a year for its sites could save £80,000- £200,000 a year in administration costs. KEY NUMBERS "An EDI billing capability is not only an acquisition tool to attract new customers in 2017 – it's a retention one too, to keep existing customers in their own area" because of pressure from the Welsh public sector and particularly the local authorities in South Wales, which have in turn been asked by the Welsh government to increase electronic payments and processing. The energy manager of one local author- ity said: "Ninety per cent of our water is sup- plied by one water company. It takes us ages to go through their CSV files, check it, sort out their columns and formats before we can use it. It will cost us £50k to go out to ten- der and if we can only save 1 per cent, that's £30k. If we can get them to provide EDI bill- ing like we get for electricity and gas, we may not need to go out to tender." Listen to what customers want An EDI billing capability is not only an acquisition tool to attract new customers in 2017 – it's a retention one too, to keep exist- ing customers in a company's own area. In addition, if water suppliers that have "opted out" of the non-household market to focus on the forthcoming household market do not provide EDI billing for housing asso- ciations, local authority housing, university halls of residence, and so on, who want it, and engage with them now to build relation- ships, then these customers may look else- where. They could be targets for predatory competitors who can provide the capability now. The way forward seems pretty simple: listen to and hear what customers want. An EDI capability and compliant "best practice" billing systems could be the number one attraction for many multi-site organisations. The decisions made now by water utilities on billing could determine their success and destiny aer April 2017. Paul Martin, managing director, TEAM