A monthly billing cycle results in exposures of up to 60 days’ settlement. Participant default is likely, and the potential loss from such an event is significant. Spot-market clearing can solve...
CIS: The new Profit Machine
some real supporting non-commodity products and services to bundle those products and services.
Craven also looks to increased customer response for efficiency and customer satisfaction. The utility can't look at an address as a premise anymore; it has to look at the customer. What options does the customer want? A classic example is asking the customer when they would like to pay their bill-perhaps on the first of every month instead of on the 12th, which is when the utility reads the meter. Craven foresees a whole host of changes coming about. If the state then becomes deregulated, the company is prepared. Regardless, the company has a more satisfied customer.
But Goodman prefers to look at a bigger picture. He says that utilities need to find ways to actually transform their organization, to be more efficient, and to do more with less. "We've done quite a bit of research and have determined that updating or replacing a traditional system in isolation-just the CIS, just the work/asset management system, or just the workforce management system-can yield marginal efficiencies/improvements/benefits," he explains. But to achieve real transformation, a more holistic view of the organization must be achieved, and information flows and processes must be facilitated across all the traditional silos, he says. That overall service delivery management strategy yields significant levels of improvement in customer satisfaction, a reduction of operations/maintenance costs, increased system reliability, decreased cost of service delivery, and a better overall use of limited capital, Goodman concludes.
But Craven sees uncertainty. He believes utilities are not making wholesale CIS replacements because there is no clear direction on where the market is going. He believes that "until this market calms down-and I don't see that for 10 years-until there is a market model that is prevalent across this country, we are going to be in a state of flux."
Craven notes that utilities are being quite prudent right now, and not just with wholesale CIS replacements, but because it is impossible to predict which market model is going to win. He points to the ERCOT model, PJM model, and the 48 contiguous states each run in a different way. "Until FERC's RTO vision comes through and the underlying wholesale markets are in place, until the retail and/or regulated markets become fairly standard in migration and movement, utilities probably would not be prudent to say, 'I'm going to build a brand new XYZ, and spend five years doing it,'" he says. "Quite honestly, in five years you'd be facing a different set of issues."
North American CIS Market In Transformation
Deregulation is the stimulus for a larger CIS footprint.
By Dr. Zarko Sumic
The traditional integrated energy utility CIS functional footprint (see Figure 1) centered on revenue management, extending into customer relationship management, commodity management, and asset management areas just enough to support its primary meter-to-cash business process focus. Energy retail deregulation created unbundling and bifurcation of the distribution utility value chain, forcing companies to pursue either energy retail or distribution businesses. Two distinct sets of business drivers forced the CIS footprint to diverge, resulting