Bringing Stability to the Shifting Complex Billing Landscape

The energy landscape is changing. The utility business model is changing. Utility customers are changing. Is the critical link between the utility and its customers – the bill and the rates through which utilities realize their revenues – keeping pace in this rapidly shifting environment? Looking at each of these segments of the energy-to-customer value chain will help answer this question.

With a focus on shifting away from carbon-based energy sources, the energy landscape is marked with some key developments that are driving today’s energy transition. Recent examples include the 2022 U.S. Inflation Reduction Act (IRA), which includes over $360 billion in energy funding, much of it for renewable energy, energy storage, and electric vehicle (EV) incentives and investments; and the 2021 Infrastructure Investment and Jobs Act which allocated $65 billion to improving the grid and $7 billion for EV charging infrastructure. Drivers like improving economics and increased awareness around environmental concerns coupled with these incentives are creating growth in new energy technologies that are changing how utilities operate.

The result is a utility operating model that is rapidly becoming less centralized and more distributed. In turn, this is creating sweeping changes in how utilities serve their customers. This is most significant in the rapid growth of renewable energy sources, particularly when they are distributed energy resources (DERs) that the utility does not own or directly control. For example, Bloomberg estimates that over 50% of cars sold in 2030 will be electric. Similarly, the US Energy Information Administration reports that residential solar power installations rose by 34% from 2.9 gigawatts in 2020 to 3.9 gigawatts in 2021. This rate of growth will continue or even accelerate with the combination of regulatory and legislative drivers (like California’s Title 24 which will require all single-family homes to be electric-ready starting in January 2023), improving costs, and IRA and additional state and local government incentives. These new dynamics create some interesting challenges for utilities operationally and in how utilities engage with their customers.

As customers become savvier in an increasingly digital, on-demand world, their energy options will continue to grow. This is good for customers and addressing climate and environmental concerns. It is potentially a good thing for utilities, too. But they must transition from relying solely on their current legacy customer information systems (CIS) and billing systems and processes to being able to leverage third-party complex billing solutions to provide a diverse and growing list of services and bill for them accurately. Herein lies the challenge.

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