Empowered by new technologies, smart billing is providing both utilities and their customers greater control over how they use—and how they pay for—their power. Here we chat with Bill Silkett, HEXstream senior sales director, to explore the benefits, challenges and key components of the smart-billing trend. 

How is billing changing among utilities? 

Bill: It used to be one-size-fits all billing for power, especially for residential. Historically, it was one charge for kilowatt hours. Now there are different use rates. There are incentive rates designed to help lower costs for consumers and increase use at off-peak hours, with the goal of balancing consumption. 

With advanced metering infrastructure (AMI), utilities now have the ability to understand what is flowing through meters in near real time, which makes more complex rate systems possible. This is a good thing for everybody. Adjustable rates benefit the utility because, with balanced consumption (lowered peaks and risen valleys), they aren’t required to build as many power plants. Brownouts and blackouts are minimized. And these rates benefit the customer with lower prices and options for flexibility in how and when they are using their power. 

Of course, the infrastructure has to be in place to enable this type of billing, to properly understand the power flowing through meters. Billing systems must be implemented to accommodate those different rates, with AMI sending updates as often as every 15 minutes and other systems required to store and manage all this meter data. 

Who is spurring these changes? Utilities? Customers? Regulators? Governments? 

Bill: All of the above. Customers expect more and better service and they want lower rates. Utilities rely on demand-side management to reduce the need to build more power plants.

Then there are the regulators, with concerns about climate change as well as minimizing rate increases while keeping utilities financially stable. 

What technologies are in play here? 

Bill: Artificial intelligence, which helps monitor the usage of power and suggests better rates. Data analytics, of course, which can help utilities communicate with their customers, “OK, you are using most of your power from midnight to 4 am. Why not switch to this rate?” Some utilities put those messages right on customers’ bills. 

What are the most common challenges with this approach? 

Bill: System complexity can limit adoption. The cost of maintaining these systems can be a problem, too, but they are getting cheaper by the day. And some customers might have privacy issues—they don’t want “the government” knowing when they are using their power. 

Is this the future of billing?

Bill: It is the present state of billing, for the top-tier utilities, at least. And it is only going to get more efficient, more cost-effective and more widespread.