How To Be Smart About Smart Metering?

As UK plc prepares for an energy efficient future, the utilities industry is under the microscope. While using green energy sources is important in the long-term, empowering customers to go green is part of the solution in the short-term. It is clear that new smart metering technologies will play a crucial role in this, enabling customers to understand and regulate their own energy consumption better. Providing customers with real-time visibility of the energy they use enables them to see how they can save money, which is the ultimate incentive to change their behaviour.

At first glance, the introduction of smart metering within the UK energy market could be viewed as extremely problematic. There is the immediate and very real impact on revenue: customers using less energy and ultimately paying less – which will hit the bottom line. An increasingly competitive market also creates issues around capital investment, ongoing asset ownership and supplier switching. Then there are the customers, who are becoming increasingly intolerant of poor service. This is driving the need to focus efforts on external change, managing customer expectations and communication to avoid additional costs associated with unplanned customer contact and complaints.

Yet, there are massive benefits that can be achieved with smart metering. Aside from the environmental advantages, it enables on-demand meter reads whilst eliminating manual meter reading costs. The cost to serve the customer will be reduced further, as customers tend to respond well to more accurate and frequent billing.

In fact, when tackled in the right way, smart metering can be seen as a huge business opportunity. ‘Smart’ managers should look beyond the basic logistics and economics of implementation and begin to exploit smart metering as the catalyst for really getting to grips with their relationship with customers. It can provide a unique source of real-time customer information, which can be used across a retail energy provider organisation to drive efficiency and guide each individual customer journey. It also marks a shift in the evolution of customer management, from a reactive relationship that is geared towards problem solving to a proactive relationship aimed at continually realigning and improving the customer experience. In the future, customers can expect to have personalised conversations centred on their individual tariff, product and service needs.

The real-time consumption data provided through smart metering can also go a long way to address ‘green disadvantages’, such as reduced revenue. It is important that tariff development taps into this detailed consumption information. This enables the delivery of a range of flexible tariffs that suit the needs of the customer, whilst supporting the revenue needs of the business. If applied intelligently, tariffs that help to control consumer demand can be developed, without a hugely detrimental impact on energy sales. Additionally, when combined with effective back office processes aimed at identifying the customer, real-time consumption information can be used to confront energy theft and minimise unbilled periods.

The advanced technology itself offers network maintenance benefits that often exceed expectations. Functionality such as auto and remote diagnostics support field force optimisation. This enables meter faults to be identified centrally, tapping into the work management system to send the right operative to complete the job. Additionally, smart metering enables some meter problems to be fixed remotely, removing the need for a visit completely.

In the US and in Europe, smart metering is delivering considerable benefits already. In Italy, the introduction of these technologies has resulted in unnecessary bill explanation enquiries dropping and the propensity to pay increasing significantly.

Yet, smart metering should always be treated as a fundamental catalyst to business-wide change to maximise the benefits for businesses and customers alike. Merely tinkering with smart metering will lead to creating inefficiencies in processes, systems and working practices. Smart metering should be seen as a driver for standardisation and simplification – both internally and for the customer. Moreover, it should be regarded as a business transformation programme with the customer at the heart of future operating models, not just an IT project. Businesses need to remember that they dealing with increasingly demanding, price-sensitive customers in an extremely competitive market, and plan accordingly. To reap the benefits of smart metering, businesses need to be smart about it.