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Case Study

How a Utility Company Launched Pay-As-You-Go To Reduce Financial Risk

Leading European utility company focused on renewable energy and environmental commitment. Pioneered the use of smart meters as a key to future energy.

This company is a power company specializing in the electricity and gas markets. It operates a wide range of hydroelectric, thermoelectric, nuclear, geothermal, wind, solar, and other renewable power plants.

The company is strongly committed to renewable energy sources and to the research and development of new environmentally friendly technologies.

Due to an EU energy regulations change, they became the first utility in the world to replace the traditional electro-mechanical meters with smart meters that make it possible to measure consumption in real-time and to manage contractual relationships remotely.

Today, in one central European country, over 34 million retail customers are equipped with smart meters they have installed, and they believe that smart meters are key to the development of smart grids, smart cities, and electric mobility.

Challenge

The upgrade from manually-read, to smart meters presented the energy company with three opportunities. To expand their product portfolio; to monitor and collect more granular usage data and to gain insight into electricity consumption and customer behaviour.

It also allowed them to introduce a pay-as-you-go (PAYG) payment model for their customers, as a solution for reducing financial risk with pre-paid services. It meant that the required solution should be able to detect and monitor account balances and over-usage.

But to support this business evolution, the company needed to reimagine its billing solution. Migrating a large customer base to a new business model, together with the complexity of new billing processes meant their current system would be unfit for purpose.

Additionally, as the company was a multinational distributor, they also needed to account for VAT variables in different markets.

Challenges in short:

Needed to upgrade customers to smart meters due to new EU regulations.

Goal to introduce a PAYG payment model to their customer community.

Needed to reimagine billing structure.

Solution

The DigitalRoute Usage Engine was implemented to collect usage data from the smart meters both in real-time and batch and bind that to individual users for transfer to the CRM and Billing systems. This gave the company a single billable record from usage of different tariffs, and the opportunity to map, authenticate and validate smart card payments.

An important function is the product’s session-handling capabilities, which can monitor account balances and detect over-usage automatically. As a result, the company now ensures that users have the necessary credits in their accounts, and can block blacklisted cards and over-usage at the moment of a transaction.

The VAT issue could easily be managed by the Usage Engine’s capability to collect usage data from several sources and bind that to a respective customer.

The product also facilitated financial settlement towards third party vendors.

Outcome

By shifting to the DigitalRoute Usage Engine, the energy company added flexible and transparent invoicing and settlements with 100% accuracy.

The new billing solution also helped prevent revenue leakage through full billing transparency, and the authentication and validation process eliminated over-usage, preventing fraudulent consumption.

With all usage data running through a single solution, the company can now dramatically decrease time to market for new business models.

The insights of consumption have enabled the company to now offer tailored promotions to individuals based on their behaviour, which has led to improved customer retention and loyalty.

Outcome in short:

Flexible and transparent invoicing and settlements with 100% accuracy.

Possibility to offer tailored promotions to individuals.

Revenue leakage prevention.

Improved customer retention and loyalty.

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