Utility Juices Up Online Bill Payment

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May 22, 2000 (Computerworld) -- In just six months - a breakneck pace even for the newly competitive utilities industry - Northeast Utilities set up a new system that lets its electricity customers pay bills via the Internet.
"Several thousand" Northeast customers were using the online system as of this month, just two months after it was launched, said Daniel Chagnot, the information technology manager for the project.
"From concept to getting it actually working was six months, and that's an unheard-of thing in the utilities industry," which is typically known for its bureaucracy and plodding pace, said Patricia Mulholland, project manager of customer service operations at Berlin, Conn.-based Northeast, which serves 1.7 million business and residential customers in New England.
Mulholland attributed the speed of the rollout to weekly meetings between Northeast's staff and its technology partners, Mobius Management Systems Inc. in Rye, N.Y., and CheckFree Corp. in Atlanta.
While the price tag for the new system was $500,000, that much is expected to be saved in just one year because the system allows Northeast to store digital images of bills on servers rather than on costly microfiche, said Chagnot.
While the pace of implementation was notable, Northeast's new system is far from unique. According to analysts, several large electrical utility companies in the U.S. allow customers to pay bills via the Internet (see chart). The trend toward electronic bill presentment and payment in utilities is about 6 months old and illustrates the new competitiveness among utilities players, said analysts.
"Utilities have been as backward as companies come in the industrial world," said Ethan Cohen, a utilities analyst at Aberdeen Group Inc. in Boston. But deregulation, now in place in some form in 23 states, has sparked more initiative within the industry, he noted.
A recent survey conducted by Gartner Group Inc. in Stamford, Conn., looked at 150 companies across five major industrial sectors in the U.S. It found that while "utilities have been the most behind in e-billing, they are now the most aggressive" in setting up such systems, said Gartner analyst Avivah Litan.
Mulholland said competitive pressures from other utilities certainly played a role in pushing the electronic bill presentment and payment project at Northeast, but customer feedback also contributed to the decision.
A recent Northeast survey of 1,000 customers showed that a surprisingly high 10% would be interested in online payment, Mulholland said.

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