case study sweden: energy bill to energy statement ... · pdf file• one bill...

Case Study Sweden: Energy bill to

energy statement – payment

flexibility

TailorMade in short

• Billing for Telco and Utilities

• Office in Stockholm Sweden and Summit New Jersey

• Modern Holdings Inc.

• Long-term investment since 2005 in Utility offering

• Focus markets

– Scandinavia

– The US

– Some European competitive markets

• Partner strategy

Background within Telco

• Large transaction volumes

• +20 markets and +25 million customers

• Competition and cost efficiency

– Ex. $4 vs. $0.70 per invoice

• Pricing real-time or near real-time

• Flexibility in payment process

– Product strategy – not a consultancy

TailorMades solution offering

• Micro Production Billing

• Smart City Billing

• Smart Billing

• Large Account Billing

• Budget Payment

• Hot Billing

• Pre Paid

• Convergent Invoicing

Sweden electricity facts

• Total consumption 2009, 138.8 TWh

• Consumption per capita 2009, 15 000 kWh

• The distribution system is divided in three levels– Local distribution system

operators DSO (170)

– Regional DSO (3)

– The Swedish national grid

• Approximatly 5.2 milion electricity users connected to the grid

• Approximatly 100 electricity suppliers

Swedish electricity market

Smart meters since 2009

- market challenges

• Increased competition

– 6-12% churn

– Market consolidation in retail business

• Increased transparency in risks for the

consumers

• New business models

• Additional services and bundles

Market trends

• The requirements are:

– monthly readings (<63 Amp)

• There is a shift against hourly reading

• More data is being collected from the meters

• Different kind of home display are being

offered to customers.

• Customer segmentation and converged billing

– Similarities to Texas

Bixia

• Started in 1997

• Energy retail company

– Owned by 9 regional utility companies

– 18 offices in the south and middle of Sweden

– Energy purchase at Nordpool

– Fourth largest in Sweden, 300 000 customers and

turnover sales 3 billion SEK

Utility Account case - Bixia

• Multiple services with different CIS and billing

processes

• Bixia new brand is joint venture focusing on

retail business and added services

• No common customer view

• 8% churn and increasing

Bixia - The new offering

• One bill for all services

• Segmented new utility account offering

– Budget payment plan to utility account

– Account fee

– Interest

• Instalment payments

• Deposit account

Utility account overview

Customer

Self servicePayments

Bank / Direct Debit

Top up through

- Direct debit, optional amount

- Direct payment from bank

- Credit card

- Voucher

Can handle:

Electricity

Heat

Water

Broadband

Telephony

Gas

TV

Service Providers

Etc..

Electricity

Heat , etc

Utility Account

Open or

smallest

amount bill

Utility Account – consumer value

• Even cash-flow

• Improved cost control

• Simplified payment process

– Direct debt payment

• Personalized information and billing process

• Extra service with My Account

Utility Account – Utility company value

• Loyalty tool

– Added services

• New financial revenues improves retail margin

– Interest and account fees

• Segmentation in offerings and collection flow

• Stand-alone product with limited integration with CIS required

• One bill – convergent invoicing solution lower costs

• Simplified administration of certain payment processes

Bixia – Some results

• Churn lowered with more than 50% among

utility account customers

• ROI less than 6 months

– Savings with one billing

– Retail revenue margins up ca 30% for utility

account customers

• Will make all customers Utility Account

customers

Hot Billing case – Storuman Energy

- Energy retail company located in the north of Sweden

- 50 000 electricity customer

- 20 employees

- Only electricity retail customers with low margin

- Volatile market prices increase risks in the retail business with most customers on fixed price contracts

Hot BillingHot BillingMeter valuesMeter values

PricesPrices

Rated

values

Rated

values

Objects

Hot Billing Overview

Energy bill

Transparency for the customers

Jari saved 50 öre/kWh

• Jari in Borås saved 50 öre per kWh in December 2010 as he had selected a new modern electricity contract.

• With ”Elmixen” he saved 951 kronor (approximately $150) that month.

Storuman Energy – Some results

- Over 60% of new customers choose the new

Elmix product

- PR-value and meetings with ministers

- Lowered risk in the energy retail business with

up to 50% on Elmix customers

Thank You!

Jesper Uhlin, Product Manager TailorMade

jesper.uhlin@tailormadeglobal.com

www.tailormadeglobal.com

BILLING SOLUTIONS

THAT ADD

BUSINESS VALUE