Utilities to turn to the Internet for Billing in New Century

by Beth Cox

Companies that deliver water, gas, electricity and other services to households and businesses have stepped up plans to offer e-business services to lock in customers and lock out the competition, says a new study.

According to the study by Killen & Associates, by year-end 2002, billers will use electronic bill presentment (EBP) to send 27 percent of the bills they issue. The report, entitled "Utilities: EBPP Opportunities and Threats," examines the ways in which utilities can compete for share in new and existing markets using electronic bill presentment and payment (EBPP) services.

"Globally, utilities lead in repetitive billing, accounting for over 25 percent of all global repetitive bills," said Michael Killen, founder and chairman of the market research firm.

"There are clear incentives for them to convert repetitive bill payments from the current heavy reliance on paper checks and cash to fully electronic methods. Not the least of these incentives is new competition to their long-held market positions. The CEOs of the utilities are reacting to new realities of the market."

"Many large electric and gas companies and their chosen suppliers are leading the way," Killen said. "Among them are PECO Energy and Con Edison, distributing bills through TransPoint; Boston Edison, using eDocs and CheckFree; Carolina Power & Light and Virginia Power, using CheckFree; and Cinergy, using Princeton eCom."

San Antonio Water & Power has chosen Billserv.com and Kissimmee Utility Authority of Florida picked Derivion.

"As regulators loosen the strings on what utilities can and cannot do, we are going to see more of them offering multiple services. They will begin to capitalize on e-commerce opportunities, using EBPP to gain other e-commerce revenues," Killen said.

The study examines the utilities' billing cost structure, global and regional bill presentment and payment trends, global deployment forecasts, analysis of bill payment types and transaction costs, annual and cumulative EBPP penetration rates through 2010, current supplier/utility relationships, EBPP-related revenue growth opportunities, and business drivers.

The study makes recommendations and suggests actions to take for the survival and success of the utility companies. The study also reports on recent EBPP activities by utilities in Canada and Europe.

Killen & Associates provides EBPP business intelligence to business professionals in the telco, utilities, and financial services industries worldwide.