UK specialist utilities and smart energy consultancy Engage Consulting, has added a new cost module to its Revenue and Margin Assurance (RAMA) Solution, which will enable energy suppliers to calculate gross margin for each of their meters. Their new cost module will help energy suppliers overcome billing versus settlement challenges.
Gaps between billed revenue and settlement costs are a common problem for suppliers and they can result in millions of pounds of lost revenue through over-settlement and under-billing. Consumer relationships also tend take a knock as a result of overbilling. Utilities are beginning to realise that customer-centric billing is critical if they want to prosper in a highly competitive market [Engerati-Customer-centric billing in newly competitive markets: A case study using billing processes to create competitive advantages.] Such gaps are difficult to identify and time-consuming to resolve, as the processes involved can be highly complex. [Engerati-Dynamic smart billing-closing the gap.]
Imbalance gaps-the causes
Any number of factors can contribute to imbalance gaps including:
· Inaccurate meter readings which results in the use of incorrect or estimated readings
·Incorrect information held in billing systems which often leads to billing inaccuracies
· Incorrect information held in settlement and registration systems – This results in inaccurate settlement volumes
Managing the imbalance gap
RAMA automatically tracks, monitors and analyses suppliers’ billing and settlement data on an on-going basis, identifying the sources of energy volume and cost discrepancies across their electricity and gas and customer portfolios. Any volume gaps and margin issues are flagged up in time for issues to be resolved before the billing and settlement deadlines expire, and suppliers gain complete visibility of which meters are causing problems. Traditionally, inaccurate readings have taken anywhere from months to years to identify and then resolve. In most cases, these have been brought to the utility’s attention only when customers have flagged inconsistencies in their energy bills [Bridging the Gap Between Distributors And Customers.]The system provides vital business information on their efforts to manage the imbalance gap that can help suppliers increase their profitability.
Richard Cullen, Practice Director, Engage Consulting says, “Getting the balance right between settlement and billing can be tricky and costly for suppliers. RAMA has been designed by energy sector technical experts with a deep understanding of customer billing and settlement processes, and data analysts with many years’ experience working with energy suppliers on these issues. We believe RAMA can benefit all energy companies, whether they are a niche supplier or one operating across a number of customer segments, deliver tangible financial and customer benefits and mitigate regulatory risks. With the countdown to the smart meter rollout in the UK just over a year away, now is the time for suppliers to get on top of their billing and settlement processes and put automated systems in place that will enable them to maximise all the opportunities in the smart world.”
John Peters, Managing Director of Engage Consulting discusses the opportunities in Smarter Metering Promises New Revenue Opportunities.