BILLING AND CRM INNOVATIVE SMART BILLING FOR HOUSEHOLD CONSUMERS Evolving energy legislation and millennium efficiency targets are evidence that energy security and sustainability are an on-going concern worldwide. Government mandates and policy dictate the manner in which the electricity market operates. This has translated into energy providers being required to provide residential customers with detailed consumption feedback in an effort to raise awareness around household electricity usage and cost. Utilities, particularly in the developed world, are seeking to transform electricity and gas from a low-interest commodity to one that generates dynamic interaction between the distribution company and the customer. Countries such as Ireland, Australia and the US have looked at using customer billing, amongst other smart meter-related technologies, as a platform to educate customers on their consumption. The billing structure in each country may differ, but the extent to which electricity usage has been reduced is synonymous with the comprehensiveness of the bills and the frequency with which they are sent to customers. Enhancing bills can be a cost- effective method of reaching the customer base as a whole or for targeting certain groups, making it an excellent tool to help utilities assist their customers to improve their energy management. It is worthwhile considering the impact of smart billing across different geographical contexts and where smart meters have acted as the pre-cursor to smart billing. California, USA After failed attempts to deregulate the Californian electricity market in the nineties, West Coast utilities – Pacific Gas and Electric Company (PG&E), Southern California Edison (SCE) and San Diego Gas and Electric Company (SDG&E) – resumed control of 80% of California’s electricity consumer market. California is one of the most densely populated states in the US with 13 million residential customers. Residential electricity prices have risen by 30% since 2003, and in 2012 stood at 35% above the national average. Two overriding factors are pushing up electricity prices and increasing the frequency with which network failures occur. California experiences shortages in generation capacity and lacks adequate demand response measures to mitigate peak demand during the Californian summers. 72 Despite the imbalance of supply and demand, the West Coast state is recognised for having developed ‘one of the world’s most comprehensive set of policies aimed at managing energy consumption.’ 1 The state endeavoured to shave peak demand by making energy efficiency a national priority through regulatory frameworks such as California’s Long Term Energy Efficiency Strategic Plan and the loading order* under Assembly Bill 1890 (1996) Assembly 995 (2000), providing the legislative impetus for smart billing and raising awareness around customer energy consumption. The Sacramento Municipal Utility District (SMUD) partnered with Opower to deliver home energy reports to SMUD customers, encouraging them to manage their electricity usage. The report provided feedback on electricity consumption in the home compared to similar neighbours, personalised usage comparison and shared tips on how each household could save energy. of energy reports on the consumption of first wave participants, 30 months after they started receiving the reports in 2008. These results indicated that high-energy- use consumers receiving monthly reports reduced their consumption by 2.6%, equivalent to monthly savings of 27kWh. Those receiving quarterly reports managed to reduce their usage by 1.5%, equivalent to 7kWh savings per month. Integral Analytics, a US based analytical software and consulting firm, in an independent study on SMUD’s Home Energy report, additionally noted: • Targeting high-use customers yielded the most savings • The second wave of home energy reports (October 2010-September 2011) included a sub-group, which received targeted seasonal burst notifications that yielded 1 78kWh saving annually. The monthly average of about 15kWh masks seasonal impacts, which are Figure 1. This graph allows consumers to track their consumption in comparison to that of their neighbours. The impact of the SMUD home energy reports on the consumption of 35 000 participants (selected randomly and broken down into three subgroups: monthly report recipients, quarterly report recipients and a third group that stopped receiving reports altogether) to be able to assess the longevity of energy savings driven by energy reports. Customers with an average consumption rate above 8 000kWh annually received home energy reports monthly, while those falling below the 8 000kWh mark received reports once (quarterly). The results, reported by the VaasaETT ‘Case study on innovative smart billing for household consumers’, relates to the impact closer to 25kWh per month at the height of summer. The strategy also yielded 0.06kW reductions on summer peak days. Given that this strategy only involved 4 mailers (4 monthly reports) it appears to be an effective strategy in terms of overall cost effectiveness. 2 Integral Analytics also tried to establish the source of energy savings in households utilising the energy reports. They discovered that users more commonly undertook behavioural actions resulting in 60% savings (i.e. turning off computers at night, only running washers with full loads). This is compared to structural changes of 40% – swopping over to energy efficiency METERING INTERNATIONAL ISSUE - 4 | 2014