Engage launches new Cost module to tackle billing vs settlement challenges for energy suppliers

Engage Consulting, a UK specialist utilities and smart energy consultancy, has added a new cost module to its Revenue and Margin Assurance (RAMA) Solution, which will enable energy suppliers to calculate gross margin for each of their meters.

Gaps between billed revenue and settlement costs are a common problem for suppliers. They can result in millions of pounds of lost revenue through over settlement and under billing and damage customer relationships through overbilling. Such gaps are difficult to identify and time consuming to resolve, as the processes involved are highly complex.

The causes of imbalance gaps

Any number of factors can contribute to imbalance gaps including:

·      inaccurate meter readings –– resulting in use of incorrect or estimated readings

·      incorrect information held in billing systems – resulting in billing inaccuracies

·      incorrect information held in settlement and registration systems – resulting in inaccurate settlement volumes

RAMA automatically tracks, monitors and analyses suppliers’ billing and settlement data on an on-going basis, identifying the sources of energy volume and cost discrepancies across their electricity and gas and customer portfolios. Any volume gaps and margin issues are flagged up in time for issues to be resolved before the billing and settlement deadlines expire, and suppliers gain complete visibility of which meters are causing problems. The system provides vital business information on their efforts to manage the imbalance gap that can help suppliers increase their profitability.

Richard Cullen, practice director, Engage Consulting said, “Getting the balance right between settlement and billing can be tricky and costly for suppliers. RAMA has been designed by energy sector technical experts with a deep understanding of customer billing and settlement processes, and data analysts with many years’ experience working with energy suppliers on these issues. We believe RAMA can benefit all energy companies, whether they are a niche supplier or one operating across a number of customer segments, deliver tangible financial and customer benefits and mitigate regulatory risks. With the countdown to the smart meter rollout in the UK just over a year away, now is the time for suppliers to get on top of their billing and settlement processes and put automated systems in place that will enable them to maximise all the opportunities in the smart world. “