Harried energy managers need help. (Changes in the Utility Industry Increase Energy Concerns).(Brief Article)

Over the last decade, the utility industry experienced tremendous upheaval, as deregulation and technological advances changed the way companies and consumers purchase power. As new levels of complexity emerge, commercial customers are quickly seeing the logic in centralizing their billing processes to gain control over these expenses.

More importantly, commercial users are looking for new ways to make sense of deregulated power markets in an attempt to find better rates and to more efficiently manage expenses. As facility managers focus on the bottom line, they also want access to intelligence gleaned from analysis of energy usage in their facilities. Most companies, however, do not have the resources in-house to maintain a program that supports such initiatives.

Consider this example: Commercial Customer A has 2800 store locations across the United States. It receives utility bills from 1150 separate service providers each month, and it spends over $35 million each year on utilities. Customer A deals with 50 different state regulatory groups. Two utility markets where it has stores are in the process of deregulating, introducing new options for energy providers. Several states are changing utility bill formats and account numbers, creating potential pitfalls for Customer A's accounting department. And many utilities are compressing the window of time for paying bills, even as mail delivery times slow to accommodate post-September 11 security concerns, all of which raises the likelihood of late fees and disconnects.

Customer A has only two people handling energy issues in-house and an overworked accounts payable department.

While in-house employees are most likely talented and motivated, they are probably too overwhelmed to gather the data needed for cost and usage analysis; their main concern is getting the bills paid on time. And if the focus is primarily on payment, how can in-house staff continually monitor which providers offer the best rates in 1150 different service territories? Or scrutinize every bill each month for billing errors and meter misreads? They cannot, and a steady stream of avoidable expenses, from duplicate invoices to water leaks to incorrect rates, are overlooked. These errors can average or even exceed one percent of a company's utility expenses, adding up to hundreds of thousands of dollars a year.

Listening to the End User

Six years ago, the founders of Avista began working on a concept that would help commercial customers adapt to the changing markets. Large power users expressed the same concerns over and over. They worried about the increasing volume and complexity of the utility bills they received each month and the energy management challenges facing large, multi-site companies.