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Defining The Business Value Of Technology
September 27, 1999
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Energy Suppliers And Customers Get Wired
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nformation technology is helping the utility industry enhance communications with and service to their customers-an increasingly critical undertaking as deregulation brings choices about energy suppliers to a growing number of users. These companies are using the Internet and call-center technologies to streamline processes, with an eye on developing more-efficient operations that offer direct benefits to their customers. At the same time, these technologies can also help utilities enhance their own sales efforts and reduce the costs of servicing customers.
PG&E Corp., a gas and electric utility in San Francisco, is making customer service a priority with an Internet tool that lets it monitor the power consumption of its largest users. "We're seeing how we can exploit the Internet and provide information to our customers," says PG&E VP and CIO John Keast. The utility has developed PowerSite, a Web portal that ties an Internet front end to customers' back-end systems and intelligent meters, letting PG&E and its clients view energy-usage data. "We can point out, in close to real time, inefficient use of the energy as it happens, so it doesn't show up as cost increases when the bill comes in," Keast says.
Additionally, the company has implemented a sales-automation and business- intelligence tool called Aurum from Aurum Software Inc. that lets salespeople view details about customers' gas transmissions across the 27 states in which PG&E operates, so that they can be prepared to sell precisely to the needs of their business customers and distributor clients. Says Keast, "Our value propositions include working with customers to procure energy efficiently, eliminate the risk of purchasing energy, and help customers lock in pricing, because energy prices can jump like the stock market."
At Southern Co. in Atlanta, senior VP and CIO Robert Beason says his company has gained a competitive edge by giving customers real-time access to changing energy rates, which lets them plan infrastructure costs with more accuracy. In many cases, energy is the single largest cost in business customers' manufacturing processes, Beason says. And the cost of energy generation varies dramatically based on fuel source, demand, season, and other factors, including the generating plant; Southern has 66 plants, and the ones built 60 years ago don't operate as efficiently as newer facilities. Southern also has different pricing models for customers, based on load factors, total power used, industry, and other requirements. The utility uses a mainframe to manage all the calculations necessary to arrive at pricing information.
Southern is taking advantage of the Web to provide its customers with advance calculations of energy costs for the next day, by the hour. "Customers can access pricing over the Internet," Beason says. "They get really good price breaks in normal conditions," thanks in part to programming code that attempts to "get the next watt of energy from the most efficient plant" for that customer. Even during peak times, such as summer heat waves, Beason says, customers can use the real-time access to manage energy usage better at their facilities, rearranging some business processes around the least expensive times of the day. Customers have ID- and password-protected access to a secure site running on Windows NT servers. An application server provides access to customer-specific prices from an Oracle database running on an HP-UX system. The pricing information is moved to the HP-UX system from the mainframe.
Previously, the only way customers could access this information was via phone or fax, and Beason says he had some reservations about moving this data to the Web. "Early on, we were concerned about security because we couldn't have anybody except that one customer seeing rates," says Beason. "We had to put in authentication and encryption." So far, Southern has more than 100 customers on the plan; there have been no problems with security breaches, and users are enthusiastic, Beason says. "Customers say it's more efficient for them, and I know it's more efficient for us," he says. "It really affects our bottom line."
Like Southern, Unicom Corp. in Chicago is helping business customers plan their gas and electric usage for the day by also providing real-time pricing over the Web. Paul Janis, VP of IS for Unicom, says that during heat waves, customers can run some of their machines on the second shift, for example, since energy is cheaper in the evening. "Increasingly, we're seeing that the running of the distribution part of our business is an information business," Janis says.
Reduce Costs
Utilities are also introducing convenience services for consumers, such as online bill paying. Florida Power & Light Co. in Juno Beach, Fla., lets customers make payments online via CheckFree services, and it is pursuing other payment options via the Internet. "We're servicing people through the Internet," says Susan Gampfer, director of planning and architecture for the utility.
But Florida Power & Light was also the first in the industry to take advantage of the Internet for real-time bill payment posting, according to the company. These services are designed for customers who are late with payments and want to post those payments immediately; customers who were disconnected for nonpayment of bills and need to pay to get power reconnected quickly; people who have no checking accounts or who must pay in cash because they have a history of sending checks their accounts can't cover; and customers who simply prefer to save the cost of a stamp or to make payments in person. 
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