Billing

Best Practices to Help Billers Drive Consumer Adoption of Paperless E-Bills

Executive Summary

With rising costs that threaten to erode profit margins, billing organizations are constantly looking for ways to decrease expenditures without sacrificing customer satisfaction. Companies that incur significant expenses associated with the delivery of recurring bills are fully aware of the cost savings to be had by offering e-bills (electronic representations of bills) in lieu of the traditional paper bills. This white paper is intended to be thought-provoking and offer ideas and considerations for driving paperless adoption. It will discuss best practices, what to look for in an electronic billing and payment (EBP) provider, and suggestions for creating a business case for e-bills.

Every interaction with your customers is an opportunity to strengthen relationships and maximize business profitability. Billing and payment touch points are ideal interactions because they command consumers’ attention every month. The key is to meet consumers where they choose to view and pay your bill and strategically guide them to low-cost channels, beginning with online payments and ultimately paperless billing.

Many billing organizations have aggressive paper suppression goals as part of an overall cost-savings initiative. A well thought-out strategy with a strong understanding of consumer preferences is necessary to maximize consumer adoption of paperless billing. This white paper will help billing organizations reach their paperless goals by highlighting best practices such as implementing the best EBP user interface and customer experience, utilizing a multi-channel approach, deploying effective marketing tactics and other innovative tactics.

Best Practice #1: Choose the Right EBP Solution

It is important to understand customer preferences in order to meet their payment needs while also guiding them from online payment to paperless billing. You want a user-friendly EBP solution that allows you to optimize every customer interaction and supports your paperless billing initiative.

Here are several best practices for creating an effective EBP experience at your site:

Enrollment – It should be very easy for consumers to find where to enroll on your site and the process should be painless. Don’t make it an obstacle. The information needed to enroll should be readily available to the consumer and should be limited to only that which is needed to meet your company’s security standards for validating a consumer’s identity. Minimizing the number of required fields decreases the opportunity for data entry errors that lead to frustration and abandonment from your site. It’s also important to make e-bill enrollment available through offline channels as well. Have your customer service reps offer to enroll customers while on the phone. If you have a location that customers visit in person, enable enrollment in these locations as well. Better yet, consider moving the enrollment process to the time of activation with your company so all new customers will be paperless.

User Interface – Customer experience at your site is paramount. Your EBP application should be customizable to match the look, feel and branding of your website to avoid confusing users with a disjointed process. The user interface (UI), if designed correctly, can play a leading role in creating a positive customer experience and driving e-bill adoption. The most important best practice to help drive paperless adoption is to continually educate consumers on what an e-bill is and the many personal and environmental benefits. The UI should be designed in such a way that e-bill messaging is prominent and eye-catching. In addition to repeatedly defining an e-bill and explaining its benefits throughout your site, include a thumbnail picture of your e-bill to help users make a direct association between the paper bill and the e-bill.

There are other ways your user interface can help drive paperless billing at your website, so make sure your EBP solution is capable of the following:

Allows and encourages customers to turn paper bills off and on at their discretion from your website. With a highly visible paper bill status indicator on your website, consumers get the comfort, choice and control they are looking for. This will eliminate calls to your call center requesting to turn paper bills off and on.
Offers various ways to answer questions about bill payment and presentment with easy-to-find help text. Make sure the help text appears on the EBP pages so the user doesn’t have to leave the page or interrupt a task to search for help.

EBP Functionality – A rich customer experience can have a significant impact on driving more consumers online. You can facilitate customers’ use of your online channel and ultimately paperless billing by implementing a user-tested application that meets their needs. Based on consumer feedback, you should consider the following best practices:

Offer real-time information so users can view their bill summary immediately after enrollment
Develop functionality that seamlessly integrates into your current website so customers don’t have to log in separately to view and pay bills
Display bill presentment and payment within the website without pop-up windows
Provide customers the flexibility to choose their preferred payment method (scheduled, one-time, recurring, Auto Pay) and their preferred funding source (checking account, credit card, debit card)
Present e-bill as a mirror image of the paper bill to ensure a smooth transition to your electronic version
Enable billing-related notifications via multiple channels like e-mail or text messages
Store a sufficient amount of bill history with quick and easy retrieval capabilities

Best Practice #2: Consider a Multi-Channel Approach To Distribute Your e-Bills

New technologies have changed the way consumers choose to pay bills. While more than 51 percent of U.S. online bill payers use biller direct sites, 25 percent prefer the convenience of single bill pay sites¹ and that segment is expected to continue growing. Forrester predicts that bank EBP growth rates will be close to twice that of biller sites through 2011² and TowerGroup estimates a bank EBP compounded annual growth rate of 24 percent through 2012.³ Therefore, in order to meet all your consumers at their preferred payment channels, you need to make your e-bills available at bank and financial websites in addition to your biller direct site.

Only 17 percent of U.S. billing organizations have not identified the bank channel as important to their online billing strategy, while the other 83 percent have already begun utilizing the consolidated channel and plan to continue doing so in the future.⁴ The days of viewing bank websites as your competition are long gone. Complementing your biller direct site with e-bill presentment in the bank channel is the way to meet all your online consumers at their payment point of preference.

You will not lose cross-sell and up-sell opportunities at your site because approximately two thirds of e-bill recipients visit their biller’s website for self-service or last-minute payment activities.¹ Instead, you gain the opportunity to increase your paperless adoption rates.

The same study states that consumers who pay bills at bank sites have a higher propensity to go paperless. The data shows that in 2007, the percentage of consumers who opted for paperless bills at their bank site is double that of consumers choosing paperless at biller direct sites. When a large national insurance company began delivering its bills electronically to banks and financial institutions in January of 2008, they grew enrollments by 85,000 enrollments in the first three months alone. This is an example of the success to be achieved by distributing e-bills to banks and financial institutions.

With every paper bill turned off, you save on all the expenses of mailing bills: paper, printing, mailing envelopes, return envelopes, handling and postage, but the savings don’t stop there. Many of the large banks and financial institutions aggressively promote the availability of billers’ e-bills. You can benefit from all the e-bill marketing messages directed to your customers at no cost to you.

In addition to cost savings, distributing your e-bills to bank and financial institution websites will improve customer satisfaction and retention. According to CheckFree Consumer Insights data, 27 percent of consumers who receive a biller’s e-bills at their home banking site are more satisfied with that biller and 33 percent are more loyal.¹ Unfortunately, the converse may also be true. Consumers who are already paying bills at their home banking site will be dissatisfied with your company if your e-bill is not available where they prefer to view and pay bills.

Distribution of your bills electronically to banks and financial institutions is the perfect complement to your own biller direct site. It is an essential part of any EBP strategy because it is the only way to give consumers the option of paperless billing from their home banking site. By delivering your e-bills to the bank channel, you can satisfy consumers’ needs at their payment point of preference while making headway on your paper adoption goals. It is a win-win for you and your customers.

Best Practice #3: Marketing and Promoting e-Bills

Once you have an easy, user-friendly e-bill program, the next step is to create a marketing campaign to drive awareness and guide customers from their current paper-based bill pay routine to online billing. Craft a clear, concise, actionable message and continually promote it through multiple consumer touch points. The message should include an explanation of what an e-bill is and the many advantages over the traditional paper bill. Emphasize specific consumer benefits (reduces risk of identity fraud, reduces clutter, simplifies bill management, saves time) and the environmental impact (reduces paper, saves trees and conserves energy).

Many companies have seen great success by educating consumers on the positive environmental impact of paperless billing as a way to drive e-bill adoption. According to a survey by CheckFree Consumer Insights, 48 percent of consumers cited, “It’s better for the environment,” as the top reason for choosing paperless billing. Consider a similar approach and direct proceeds to a local charitable organization to give customers an opportunity to make a difference within their own community.

Another marketing approach that has proven successful is offering sweepstakes incentives to enroll in e-bills. Con Edison of New York has used this approach by offering prizes such as MacBook®
computers and ENERGY STAR room air conditioners. Its most recent sweepstakes offered the chance to win an Apple®
iPhone™. The results were great; e-bill adoption increased 48 percent over the same period the prior year.

Whether your message focuses on the environment, convenience or both, use it to promote your e-bill service at every possible consumer touch point in an ongoing campaign. The following are steps you can take quickly and inexpensively:

Print a targeted message on consumer bills and return envelopes
Announce your campaign through a companysponsored press release
Display dynamic e-bill messaging prominently throughout your website
Include a thumbnail image of your e-bill to provide a visual reference for consumers
Incorporate an e-bill message in your on-hold recording
Have your customer service representatives promote e-bills over the phone and in person
Present the electronic bill as a mirror image of the paper bill to ensure a smooth transition to your electronic version
Dedicate a section to e-bills in your customer newsletter
Create a specific e-bill communication delivered via e-mail
Supplement your own consumer education efforts with tools such as PayItGreen.org and eBILLPLACE.com

Make every effort to find an internal executive champion for your marketing ideas and remember that the most successful campaigns are those that are comprehensive, ubiquitous and ongoing.

Best Practice #4: Utilize Innovative Tactics

In spite of all your communication efforts, some consumers may still not be comfortable with the idea of giving up their paper bill because it serves as a physical reminder of a due payment or for recordkeeping purposes. There are many who still don’t understand what an e-bill is or how it works. To combat the education and awareness barriers, take the opportunity to think and act outside the box. Here are three examples of successful innovative tactics:

1. Give Consumers Control of E-Bills at Bank Websites
In 2008, 45 percent of e-bill viewers said that the ability to turn on their paper bill at anytime would make them more willing to suppress their paper versions.¹ The idea of going paperless becomes more attractive when the consumer is given choice and control. Earlier in this paper, it was recommended to choose an EBP solution that enables customers to turn their paper bills on and off from your biller direct site. Now, consider going one step further and create the same sense of control for your customers at consolidated sites by enabling an e-bill trial period. (This is only possible if you are already delivering your e-bills to bank and financial institution websites.) A trial period gives consumers two options: 1) Sign up for paperless e-bills or 2) Enter an e-bill trial period to become familiar with e-bills while the paper bill remains. Verizon Communications implemented this tactic and saw a 10 percent increase in e-bill activations, and almost 50 percent of customers presented with the trial
period opted to suppress their paper bill either immediately or at some point during the 90-day trial period.

2. Utilize Your Front Line to Help Drive E-Bill Adoption
Generally, a biller’s goal is to drive customers online for billing and payment activities rather than having them call customer service representatives (CSRs). However each phone call is extremely important because it is often the only human contact customers have with your company. Try a novel approach and include CSRs in your plan to drive e-bill adoption. Start by determining what motivates them – whether it’s an in-office party, a catered lunch or the chance to win a prize. Then communicate to your front line employees that you need their help educating consumers on the benefits of e-bills to drive paperless adoption. Set an e-bill activation goal and commit to a reward if the goal is reached.

Indianapolis Power & Light (IPL) created an e-bill adoption campaign for its customer service team and had positive results. An aggressive yet attainable e-bill activation goal was set and an in-office party was promised as the reward if the goal was met. The CSRs were given e-bill talking points and online enrollment instructions, and they were encouraged to promote e-bills as much as possible. They were not given a script. Instead, they were given the authority to use their own judgment when speaking with callers. After six weeks, IPL surpassed the goal and increased e-bill activations by 35 percent during the campaign. “Don’t underestimate your front line team,”
said Bill Bisson, Customer Service Manager at IPL when asked about his innovative approach to promoting e-bills.

The success of IPL’s campaign was driven by the fact that all employees, up through the top executives, understand the value of e-bills. IPL’s Executive Management Team was instrumental in driving awareness and support from the entire organization by reinforcing the importance of the e-bill adoption initiative. Bill Bisson says the success of his CSR campaign demonstrates that, “It’s important to have support from the top down.”

3. Consider Defaulting the Bill Setting to “Paperless”
During Enrollment
According to Forrester, there is a segment of consumers who have not adopted e-bills yet because they “just haven’t gotten around to it yet.”⁵ While this is a more aggressive tactic, consider this change to the account set-up process: When a consumer is asked to choose paper bills or e-bills, default the selection to e-bills. This does not restrict someone from selecting paper bills, but those who are more open to e-bills may be likely to accept the default. A large utility company in the Midwest reaped a 20 percent increase in the number of people going paperless with this approach.

Choose the Right EBP Provider to Meet Your Needs

When choosing an EBP provider, it is important to work with a company that will be a business partner rather than just a vendor. Besides finding a trusted, established organization with a proven track record and a strong history of reliability, here is a list of what to look for when you begin your evaluation:

Goal Alignment Yields Success: Choose a provider whose top priorities are aligned with yours – overcoming barriers to e-bills and driving paperless adoption.
Research is the Key: Make sure your EBP provider conducts and/or commissions ongoing research and usability testing to understand consumer behavior to make product and user interface improvements.
Innovation, Innovation, Innovation: You want a vendor who invests in the future of EBP, stays in the forefront of technology and can be quick to market with proven innovative solutions designed to drive paperless adoption.
One Size Does Not Fit All: You want a partner who will listen to you and provide a tailored solution to help you achieve your EBP goals while keeping the company’s goals in mind. The paper suppression strategy should be different for companies charged with cost reduction versus those focused on improving customer satisfaction or somewhere in between.
Largest, Widest Reach: Choose an EBP provider who has solutions for multiple channels so you can work with one company for all your EBP needs – a superior EBP solution at your biller direct site, the capability to deliver your e-bills to as many banks as possible, as well as the ability to support walk-in and phone payments.
It’s All About You: Work with a vendor who realizes that you have goals other than paper suppression and has solutions that can help. For example, if you have the desire to cross-sell and up-sell to consumers on your website, choose a vendor who can utilize billing information to create targeted, customized messaging within your EBP application.
Account Management: Having a dedicated account management team providing operational support will ensure a quality experience for your customers. They will also keep you informed on industry trends and new products.
Marketing Know-How: You want an EBP partner who offers marketing support and collaboration in developing campaigns designed to drive adoption. From experience, they should be able to tell you the best way to motivate your customers, what messages resonate best with different segments, and what incentives, if any, would be effective in changing consumer behaviors.

Tips for Building a Business Case for EBP

Once you have decided on the right EBP solution and provider for your business, the next step is to create a compelling business case to justify your recommendation and gain executive support. Achieving approval and funding for cost-saving initiatives can be more challenging than for revenue-generating projects, so here are some best practices to consider when developing your business case:

Include All Impacted Departments – According to TowerGroup, 100 percent of billers surveyed included a cost/benefit analysis from multiple departments.⁴ The benefits of including other departments in this process are two fold: not only will you receive additional data to support your business case, but you will gain internal cross-functional support early on. Both will help you when looking for executive approval of your project. This exercise will also help minimize implementation delays by keeping all impacted parties informed.

Develop a Comprehensive ROI Model – Make sure to capture all the possible savings from e-bills and paperless billing. Start with the due diligence of determining the costs associated with your current print and mail process to help accurately calculate the saving per activated e-bill. Next, forecast the e-bill adoption rate for your biller direct site. This can be challenging, so the best approach is to use industry averages. Your EBP provider should be able to supply these percentages.

If you plan to distribute your e-bills to banks and financial institutions, you need to forecast the e-bill adoption rate for this channel and include the savings into the ROI model. Your EBP provider should be able to help you predict the number of e-bill activations you can expect by determining the number of payments you currently receive from banks and applying an industry adoption average. Don’t forget to include the savings from fewer claims as a result of more accurate account information from e-bills.

Other items to be included in your ROI calculation are:

Increasing Postage Rates – Now that the USPS has the ability to raise postage rates every year, include an increase of at least one cent to your cost per bill each year.
Marketing Expenses – Include some reduced marketing expenses if your EBP provider offers marketing consultation and creative assets for your use.
Privacy and Security Expenses – With an outsourced EBP solution, you can reduce expenses associated with regulatory compliance.

Incorporate Soft Returns – While soft returns may not fit into the ROI model because they are difficult to quantify, they should not be omitted from the business case.

Research shows that consumers are more satisfied and loyal when they receive e-bills, regardless of the channel.^1&7
You can be a leader in “green” environmental activities. Forty-three percent of consumers are more likely to do business with an environmentally friendly company.⁸
As you drive more consumers to your site for bill viewing, you will increase online marketing opportunities.
Research shows that 58 percent of customer calls are billing and payment related. With new self-service features from an EBP solution, you can anticipate a decrease in billing related calls. This can allow for repurposing of FTEs.⁹

Provide Examples – Support your business case with real life examples from other billers in your industry who have implemented an EBP strategy and describe their success. This will validate the numbers in your business case. Hopefully, your EBP provider can share case studies to exemplify the potential results.

What to Avoid – The savings per e-bill will be the bulk of your cost savings so it is important to be as accurate and realistic as possible. Be conservative and don’t over estimate adoption rates. Work with your provider to get an accurate project plan to tell you the number of IT resources and hours this project will require. You might be surprised at how minimal the requirements are. And lastly, don’t forget to include initial and on-going training costs for your front-line employees. Your customer service representatives can prove to be very valuable in helping to promote e-bills to your consumers if they are properly educated.

Conclusion

Is paper suppression a priority within your organization? Has your company already implemented some or all of the best practices mentioned in this paper? If not, begin thinking about what you can do in the short term with minimal expense (bill messaging, on-hold messaging, newsletter messaging, etc.). Then determine the company’s budget and IT resources available to pursue some of the higher-impact recommendations. If you are ready to begin researching options that are best for your organization, you can find more information at www.checkfree.com/billersolutions. Or, if you are interested in learning how other billing organizations in your industry have grown their e-bill adoption rates, you can find case studies at www.checkfree.com/resourceroom.

Footnotes

CheckFree Consumer Insights, Consumer Billing and Payment Trends, February 2008
Forrester, EBPP Forecast: 2006 To 2011, May 2007
TowerGroup, Expedited Online Bill Payments: A New Revenue Stream for Financial Institutions, 2008
TowerGroup, 2008 Biller Survey on EBPP, November 2008
Forrester, Online Bill Pay 2007: Understanding The Mindset Of Holdouts, Fence-Sitters, And Quitters, December 2007
Aite, Biller Direct Technology: A Vendor Overview, August 2008
CheckFree Consumer Insights, Biller Direct Survey Findings, June 2008
Javelin Strategy and Research, The Four E’s of Green Banking, June 2008
PayStream Advisors, Consumer-To-Business Payments, Webinar, August 2006

Con Edison

Consolidated Edison Co. of New York (Con Edison) is a regulated utility serving 3.2 million electric customers in New York City and Westchester County. The company recognized that it could realize significant cost savings if more customers would adopt electronic billing, where bills are delivered electronically without a paper version. Eliminating the printing, postage, labor and equipment costs associated with paper billing can result in significant cost savings.

In addition to operational cost savings, further positive results could be gained from driving e-bill adoption, including improved customer relationships and fewer billing-related service calls. According to a Harris Interactive study conducted for CheckFree Research Services, customers who receive e-bills at a biller organization’s website show higher satisfaction levels, with 25 percent of them reporting an improved relationship with their biller as a result of receiving e-bills.

The challenge was how to attract more customers to the low-cost, high-impact online channel for billing activities and shut off their paper bills. To convince customers to change their behavior, Con Edison had to find a way to cost-effectively generate widespread awareness of electronic billing and explain how benefits, such as saving time, reducing clutter and helping the environment, outweigh concerns customers may have about giving up their paper bills.

THE ADVANTAGES OF ELECTRONIC BILLING

Together, Con Edison and CheckFree developed a comprehensive marketing campaign designed to communicate the advantages of electronic billing to as many customers as possible. As a critical first step, Con Edison gained cross-organizational alignment regarding the campaign strategy. Drawing from a longstanding commitment to the environment, the company made a strategic decision to implement an ongoing campaign that conveyed a “Go green with e-bills” message across numerous channels in order to maximize reach within its customer base. Research has shown that when attempting to change consumer behavior, a comprehensive, consistent and widespread marketing campaign is far more effective than “one-off” campaigns utilizing minimal tactics.

In May 2007, Con Edison launched the integrated marketing campaign capitalizing on the wave of consumer awareness on environmental issues. Con Edison promoted paperless billing and electronic payment through a variety of methods and channels, including:

Customer Emails;
Direct-mail postcards;
On-hold messaging;
Radio advertising;
Invoice messaging;
Press releases;
Con Edison website messaging;
My CheckFree website messaging;
Customer newsletters; and
Internal employee newsletters.

Each communication featured the company’s environmental incentive – for every customer choosing the paper-saving option of viewing and paying their bills online, Con Edison would donate $1 to a local, nonprofit tree-planting fund to help the environment in New York.

To aid in driving awareness, Con Edison made a deliberate decision to create an extended campaign designed to consistently reinforce the safety, security, simplicity and environmental benefits of electronic billing. Based on the success of the marketing activities seen thus far, Con Edison plans to include the “Go green with e-bills” theme in every consumer communication going forward.

THE RESULTS

Con Edison showed persistence and enthusiasm in pursuing a multichannel marketing campaign, and it was well worth the effort. In the first seven months after the campaign was launched, Con Edison generated impressive results, including the following:

More than 42,000 e-bills activated;
A 57 percent increase in e-bill activations over the same time period in 2006; and
A 19 percent increase in online e-bill payments over the same time period in 2006.

Con Edison also has benefited from the positive press and goodwill it’s created in the community. By providing its customers with a better, more environmentally friendly choice for paying and receiving their utility bills, Con Edison is minimizing costs, maintaining operational control, optimizing growth for its business and turning customer interactions into profitable relationships.

Smart Meters on a Roll in Canada

Electricity supply challenges in Ontario, Canada, have led the provincial government there to take aggressive action on both the supply and demand sides to meet customer electricity needs. Between now and 2025, it’s estimated that Ontario must build an almost entirely new electricity system – including replacing approximately 80 percent of current generating facilities (as they’re retired over time) and expanding the system to meet future growth. However, just as building new supply is vital, so too is conservation. That’s why Ontario’s provincial government is introducing new tools like smart meters to encourage electricity consumers to think more about how and when they use electricity. By implementing a smart metering infrastructure by 2010, the province hopes to provide a foundation for achieving a more than five percent reduction in provincial demand through load shifting, energy savings and price awareness.

Hydro One owns and operates one of the 10 largest transmission and distribution systems in North America, serving a geographic area of about 640,000 square kilometers. As the leading electricity transmitter and distributor in Ontario, the company supports the province’s goal of creating a conservation culture in Ontario and having a smart meter in every Ontario home and small business. The company’s allocation of the province’s target was 240,000 smart meters by 2007 and the full 1.3 million by 2010.

The task for Hydro One and other local distribution companies (LDCs) in the province is to meet the government time line while at the same time building an enabling solution that provides the most upside for operations, demand management and customer satisfaction. Working with the industry regulator and the LDCs, phased goals were established and allocated among the major utilities in the province.

ADVANCED METERING INFRASTRUCTURE AND SOLUTION ARCHITECTURE

Advanced metering infrastructure (AMI) is the term used to describe all of the hardware, software and connectivity required for a fully functioning smart metering system. To view AMI as just a technology to remotely read meters and bill customers, however, would be to miss the full potential of smart metering.

The core of the solution resides with the requirement for a ubiquitous communications network and an integration approach that provides for the exploitation of data from many types of devices (automated meter reading, load control, in-home displays, distribution monitoring and control and so on) by making it available to numerous enterprise applications (for example, customer information, outage management, asset management, geographic information and work execution systems).

To meet this requirement, the Hydro One team architected an end-to-end solution that rigorously sought open standards and the use of IP at all communications levels to ensure that the network and integration would be available to and compatible with numerous applications.

Hydro One’s AMI solution is based on standards (ANSI and IEEE) and open protocols (Zigbee and IP) to ensure maximum flexibility into the future as the technology and underlying applications such as in-home energy conservation devices (two-way real-time monitors, pool pump timers and so on) and various utility applications evolve.

Smart Meters

The “smarts” in any smart meter can be housed in virtually any meter platform. Meter reads are communicated at a frequency of 2.4 GHz by a radio housed under the meter’s glass. In essence, the hourly meter reads are transmitted by hopping from one meter to the next, forming a self-organizing network that culminates at the advanced meter regional collector (AMRC). This type of local area network, or LAN, is known as a mesh network and is known for its self-healing characteristics: if communication between meters is interrupted for any reason, communication paths between meters are automatically rerouted to the regional collector to ensure that data is delivered reliably and on time. The installed smart meters also have a “super capacitor,” enabling the meter to send a last communication to the utility when there has been a power outage.

Repeaters

Repeaters provide a wireless range extender for the meters and are used in less densely populated areas in the province to allow data to be transmitted from one meter to the next. Typically, repeaters are needed if the hop between meters is greater than 1 to 2 kilometers (depending on a number of factors, including terrain and ground cover).

Advanced Metering Regional Collectors

Typically installed on poles at preselected locations within a local area network, advanced metering regional collectors (AMRCs) gather the meter readings in a defined area. Most importantly, the AMRCs provide access to the wide area network (WAN), where data is sent wirelessly back to Hydro One. The AMI solution is designed to accommodate either wireless cellular or broadband WAN to backhaul hourly meter reads to the advanced metering control computer.

Advanced Metering Control Computer

The advanced metering control computer (AMCC) is used to retrieve and temporarily store meter reads from the regional collectors before they’re transmitted to the meter data management repository (discussed below). The information stored in the AMCC is available to log maintenance and data transmission faults, and to issue reports on the overall health of the AMI system.

Meter Data Management Repository

MDM/R is the acronym for the province-wide meter data management repository. The MDM/R provides a common infrastructure for receiving meter reads from all LDCs in Ontario, processing the reads to produce billing quality consumption data, and storing and managing the data. The Ontario government has entered into an agreement with the Independent Electricity System Operator to coordinate and manage implementation activities associated with the MDM/R.

Time-of-use “bucketed” data is sent from the MDM/R to Hydro One for any exception handling that may be required and for customer billing. Hydro One prepares the bill and sends it to the customer for payment.

Web Presentment of Customer Usage Data

Customer electricity usage data will be available to customers by 9 a.m. the day after they use it via a secure website. This data will be clearly marked as preliminary data until the customer has been billed.

GOALS, OBJECTIVES AND KEY ACCOMPLISHMENTS

To successfully deploy the smart metering solution described above, the Hydro One team set out to accomplish the following goals and objectives (which are enshrined in project governance plans and daily project activities):

Balance investment with the regulatory process to ensure that smart meter investments don’t get ahead of changes in regulatory requirements.
Design, test, prototype and pilot prior to buying or building – a rule that applies to all aspects of the smart meter solution architecture, from the meters and communication network to the back-office systems.
Delay building solution components until line-of-business requirements are locked down. Solution components that are unlikely to change will be built before other components to minimize the risk of rework.
Test smart meter deployment business processes, technology and customer experience throughout the process.
Ensure positive customer experience and value, including providing customers with information and tools to leverage smart meters in an appropriate time frame.
Use commercial, off-the-shelf (COTS) products where possible (as opposed to custom solutions).
Include estimation of total cost of ownership (one-time and ongoing costs) in architectural decision making.
Enable commencement of time-of-use (TOU) billing in 2009.

Key project accomplishments to date have included:

Building an in-situ lab using WiMax and meters in rural areas to test and confirm open protocols, wireless broadband interoperability, and meter performance;
Conducting a community rollout of about 15,000 meters to develop and successfully test and optimize meter change automation tools and customer communication processes;
Mass deploying of just over a quarter of a million meters across the province;
Designing and beginning to build the communication network to support the collection of hourly reads from approximately 1.3 million customers.

METER AND NETWORK DEPLOYMENT

Meter installation teams surpassed a notable milestone of 250,000 installed smart meters as of December 2007. Network deployment began in 2007 with a planned ramp-up in 2008 of installing more than 2,000 AMRCs province-wide.

Meeting these targets has required well-coordinated activities across the project team while working in parallel with external entities such as MeasurementCanada and others to ensure compliance with regulatory requirements.

Throughout meter and network deployment activities, Hydro One has adhered closely to three primary guiding principles, namely:

Safety. The following initiatives were factored into the project to help maintain a safe environment for all employees and business partners:

Internal training was integrated into the project from the inception, establishing a thorough yet common-sense compliant safety attitude throughout the team.
No employee is permitted to work on the project without a full safety refresher.
Safety represented a key element of incentive compensation for management and executive personnel.

Customer service. Given the opportunity to visit literally every customer, the success of this project is being judged daily by the manner in which the project team interacts with customers.

Every customer is provided with an information package within 15 to 30 days of the meter change.
Billing windows are scrupulously avoided through automation tools and integration to CIS in order to eliminate any disruption to the size, look and feel of the customer bill.
All customers receive a personal knock at the door before meter change.
All life-safety customers are changed by appointment or have positive contact made prior to meter change if they cannot be reached for an appointment

Productivity. Despite Hydro One’s rural footprint – which includes some areas so remote they must be accessed by all-terrain vehicle, boat or snowmobile – the installation teams maintain an average of 39.6 meters per installer-day with a peak of 97 per installer-day. They have achieved this through automation and a phased ramp-up of installers, including training and joint fieldwork with Hydro One’s partners.

IN-HOME CONSERVATION AND DEMAND MANAGEMENT

Testing will soon be underway using third-party devices for residential demand response programs that operate on the mesh network, including two-way realtime monitors, automated thermostats and load control devices. Optimally for customers, meters will serve as the key head-end device, connectable to numerous other devices within the home as illustrated in Figure 2.

While much of this technology is still in its infancy, North America-wide AMI deployments will rapidly accelerate resulting in greatly enhanced customer service opportunities going forward.

LEVERAGING THE SMART NETWORK TO INCREASE UTILITY EFFICIENCY

Hydro One is also looking ahead to applications that will leverage the smart metering communication network to increase the efficiency of its operations. As illustrated in Figure 3, these applications include distribution station monitoring, enhancements to outage management, safety monitoring, mobile work dispatch and work accomplishment, and asset security. All of the above applications have been tested in a proof-of-concept environment, and individual projects are planned to proceed on a business case basis.

Tomorrow’s Bill Payment Solutions for Today’s Businesses

Providing consumers with innovative services for more than 150 years, Western Union is an established leader in electronic and cash bill-payment solutions. We introduced our first consumer-to-consumer money transfer service in 1871 and began offering consumer-to-business bill payment services in 1989 with the introduction of the Western Union Quick Collect® service, providing consumers in the United States with convenient walk-in agent network locations where they can pay bills in cash.

In 2008, our comprehensive suite of services has grown to include Speedpay® – an electronic bill payment option that provides businesses with Internet, IVR, desktop, mobile payments, online banking and call center solutions, as well as e-bill presentment with payments and interactive outbound messaging integrated with payment processing.

THE CONSUMER-TO-BUSINESS SEGMENT

Western Union’s electronic and cash bill payment services provide consumers with fast, convenient ways to send one-time or recurring payments to a broad spectrum of industries. At Western Union we have relationships with more than 6,000 businesses and organizations that receive consumer payments, including utilities, auto finance companies, mortgage servicers, financial service providers and government agencies. These relationships form a core component of our consumer-to-business payment service and are one reason we were able to process 404 million consumer-to-business transactions in 2007.

PORTFOLIO OF SERVICES

Our consumer-to-business services give consumers choices in payment type and method, and include the following options:

Electronic payments. Consumers and billers use our Speedpay® service in the United States and the United Kingdom to make consumer payments to a variety of billers using credit cards, ATM cards and debit cards, and via ACH withdrawal. Payments are initiated through multiple channels, including biller-hosted websites, westernunion.com, IVR units, Online Banking websites and call centers.
Cash payments. Consumers use our Quick Collect® or Prepaid® services to send guaranteed funds to businesses and government agencies using cash (and in select locations, debit cards). Quick Collect is available at nearly 60,000 Western Union agent locations across the United States and Canada, while our Prepaid service can be accessed at more than 40,000 U.S. locations. Consumers can also use our Convenience Pay® service to send payments by cash or check from a smaller number of agent locations primarily to utilities and telecommunication providers.

DISTRIBUTION AND MARKETING CHANNELS

Our electronic payment services are available primarily through an IVR, over the Internet and via Call Center using a desktop application while speaking with a biller’s customer service representative. Through our Quick Pay® service, it is possible to receive payments sent from outside the United States or Canada from over 320,000 agent locations in more than 200 countries and territories around the world. We work in partnership with our billers to market our services to consumers in a number of ways, including direct mail, Email, Internet and point-of-sale advertising.

ONLINE BANKING

In late 2007, Western Union launched its Online Banking initiative, helping to change the way consumers pay their bills. The channel accelerates the speed with which billers receive payment from two to four days to a next-day or same-day delivery, and enables Western Union Payment Services to process bill payments initiated by consumers from their banks’ online banking sites.

Western Union plans to work with the nation’s largest banks to provide your customers with a new class of online banking payment that allows them to make same- and next-day payments that are posted and funded to you faster and are of a higher quality than other online banking payments currently available.

EMAIL BILL PRESENTMENT AND PAYMENT

While the benefits of electronic bill presentment and payment are compelling for both billers and consumers, low consumer adoption rates have prevented billers from fully realizing the cost savings and improved customer service levels these services promote. Western Union® Payment Services aims to change this through its integration with Striata® Email bill presentment and payment (EBPP) solutions.

With this integrated, encrypted Email bill presentment and one-click payment service, consumers no longer need to register to receive their bill electronically, visit a separate website to download the bill and send a payment, or remember multiple user names and passwords. By removing these extra steps from the process, these services become dramatically easier to use for consumers.

The critical differentiator of the Western Union/Striata service is that the entire e-bill is delivered directly into the consumer’s in-box as an encrypted off-line attachment, enabling payment to be sent through the e-bill itself using the Western Union® Speedpay service. While complementary to existing online presentment solutions, this “push” Email billing offering can be more successful at driving adoption.

Bill Pay and Presentment Solutions for Utility Companies

Recognizing that not all customers view and pay bills in the same way, Check- Free helps you deliver a complete range of billing and payment options – from the traditional methods of receiving and paying bills by mail, in person and over the phone to complete paperless online billing and payment using either a bank or your website. CheckFree offers solutions that help you meet market demands.

Whether you need to improve a single solution or your entire offering, CheckFree can offer experience and expertise in the following payment channels:

By Mail. Some people still choose to receive paper bills and write checks. CheckFree can help turn these paper checks into ACH electronic debits, speeding payment collections.
In Person. Give your customers in-person payment convenience and choice to use cash, checks, money orders or merchant-issued certificates.
By Phone. Enable your customers to pay a bill anywhere they have access to a phone, all day, every day. With the recent acquisition of CheckFree by Fiserv, you can look for Fiserv’s industry-leading BillMatrix platform to be integrated into our suite of offerings.
Online. Deliver bill paying ease and convenience through CheckFree’s full range of electronic billing and payment (EBP) solutions at your site and beyond your site.
Emergency Payments. Offer a fee-based option for last-minute online payments and eliminate expenses due to delinquent payments.
Electronic Remittance. Provide quicker access to payment funds while reducing the cost of processing paper checks.

CUSTOMER INTERACTION OPTIMIZATION

CheckFree solutions enable you to optimize each customer interaction by offering multiple payment channel options that focus on security, reliability, functionality and convenience. Each interaction with the consumer represents an ideal opportunity to enhance the customer experience and build loyal customers.

Our Customer Interaction Optimization solutions make interactions a win/win for both you and your customers. You deliver the payment channels they seek while maintaining the ability to guide them to the most profitable channel for your organization. The ultimate business objective is to steer customers to the lower cost-to-serve billing and payment option: the online channel.

CheckFree understands your company’s strategic need to direct consumers to the optimal online channel to enhance revenue growth through reductions in operating costs. By investing in substantial consumer behavior, segmentation and marketing research, CheckFree can assist with creating marketing campaigns focused on promoting your online channel. Every bill received, payment made or visit to your website can be utilized to strategically drive adoption of online bill pay, e-bills and paper shut-off.

For more than 25 years, CheckFree has been a leading provider of electronic billing and payment services. We process more than one billion electronic payments each year. With CheckFree’s Customer Interaction Optimization solutions, you can enhance your payment offerings while improving your bottom line.