[BETA] Fortnightly

Online services are popping up - for commodity trading, retail marketing and back-office billing. But is the Web right for every application?

A recent study by Connecticut-based META Group Inc. finds that while less than 5 percent of all utility commerce will be conducted electronically in 1999, 30 percent of customer service and retail bill payments will flow over the Internet by 2004. That prediction highlights a torrent of Web activity in recent months, from power trading online to retail solicitations to electronic customer billing and payment.

But do these Internet services offer real value for users? A related META study of nearly 400 energy utility websites finds that most allow little or no customer interaction. The few companies that have turned to the Web for customer interaction generally say they are disappointed with the level of use by customers. Nevertheless, the energy industry should soon approach other industries in Web use as it grows more competitive, according to META Group.

A majority of utility Web portals visited by the Fortnightly in recent months didn't appear to offer much customer interaction beyond email links, confirming META's website study findings. Innovations in online bill payment and power service, however, seem to have real benefits for customers, providing convenience and potential cost savings. And the latest attempt to move wholesale electricity trading onto the Internet, HoustonStreet.com, appears to address many of the concerns that have hindered past industry efforts. But can any Web-based system offer enough reliability to satisfy traders?

A look at what's new on the Web reveals that the biggest benefits for consumers may be not in the medium's supposed conveniences. Rather, the rush of Web-based activity itself may facilitate intense competition that will benefit customers.

Customer Billing:

TransPoint, CheckFree Square Off

The predicted trend by META of increased use of the Internet for billing has come to fruition for Consolidated Edison of New York Inc. and PECO Energy, which announced in May and July respectively that their combined 5 million customers no longer need receive their utility bills via old-fashioned "snail-mail." Instead, customers now may register to receive an electronic bill, or "e-bill," over the Internet through TransPoint, a joint venture of Microsoft, First Data Corp. and minority investor Citibank. The service is free, and allows ConEdison and PECO customers to view their bills and pay with a click of the mouse.

Con Edison touts the Internet bill payment service as easy on customers (no checks to write, no stamps to buy) and environmentally friendly (reams of paper are saved). In addition, the company will save money with the service, which costs 50 percent less than sending paper bills. A demonstration of the service through ConEd's website reveals that it is simple to use, and customers may sign up within minutes via the site.

Englewood, Colorado-based TransPoint LLC in May went online with its e-bill service for both utilities, which were pilot billers. But electronic bill presentment and payment, or EBPP, is not a new concept. (See Microsoft's Leap into Billing: A New Threat?" Public Utilities Fortnightly, Summer Supplement 1999.) CheckFree