Project Manager Janet Nevin Hyperion Project Number PR.21143171 Status of Project Ongoing Estimated Start Date 2013 Estimated Completion Date 2020 Work Plan Category Strategic
Work Description:
Currently, due to the complexities involved in the billing process, the Company utilizes a number of off-system billing processes outside of the Customer Information System (CIS), which is the front-end mainframe application for the Customer Service System (CSS), to bill customers taking service under certain rates and programs. Managing and billing these customers involves manual, labor-intensive processes and/or systems other than the CSS.
In the Off-System Billing program, the Company is in the process of automating complex billing by migrating such bills to automated billing platforms which include the Customer Care & Billing (CC&B) application and CSS. As of December 31, 2015, automation of electric standby service rates, excess distribution facilities charges, gas penalty billing, and gas distributed generation rates have been implemented. Automated processes to bill residential and small commercial net metering customers were developed in 2015 with implementation projected for first quarter 2016.
In 2016 the Off-System Billing program will carry out a complete version upgrade to the CC&B application. CC&B is used for billing electric standby service, excess distribution facilities charges, gas penalty billing and billing for gas interruptible customers. This version upgrade also involves a change to the software that generates associated customers’ bills. The software change is described in the Off-System Billing O&M white paper.
Ongoing work for the Off-System Billing program involves the development and implementation of automated billing processes for demand net metering, remote net metering, and standby service under the Company’s offset tariff, and integration of these processes into Company systems. The Company will also review the billing requirements associated with REV-driven rates and programs and assess the extent to which additional work is necessary to implement them. Based upon the extent of system and/or process changes that are needed, the Company may require additional funding for the Off-System Billing program that is not reflected in the capital request described in this white paper.
High-level schedule:
CC&B System Upgrade 2016
Demand Net Metering & Remote Net Metering 2016
Remote Net Metering 2017
New Rates/Programs 2017
2
New Rates/Programs 2018
Standby Service for Offset Tariff 2018 Program Modifications/New Rates /Programs 2019-2020
CC&B System Upgrade 2020
Justification Summary:
The continued migration of off-system billing applications to automated billing platforms allows for the elimination of the manual billing processes required to serve customers under existing complex rate structures and special programs. Billing automation work proposed in this program may also address new rate and programs that are introduced as a result of the REV proceeding, depending on the billing requirements associated with those programs.
Complex rates and programs require the calculation of multiple and/or unique billing components which are not readily available from, or currently calculated by, the Company’s CSS. The majority of the customers billed on complex rates/special programs represent the Company’s largest customers in terms of usage, annual revenue, and/or number of accounts.
Current trends indicate significant increased customer participation in special rates/programs, such as net metering. In 2015 alone, the population of net metering accounts grew over 55%, increasing from approximately 3,800 to over 5,900. This growth exceeded prior forecasts, and it is projected that the population of net metering customers will exceed 10,000 by the end of 2018.
Manual processes can be prone to error, cause billing delays, and – for complex rates like the Company’s offset tariff – become difficult to effectively support with even small increases in customer participation.
Automation of the complex processes associated with these rates/programs yields the following benefits:
Consistency in billing processes, reduced risk of human error, and elimination of delays in billing associated with manual processes,
Reduced dependence on obsolete satellite applications and stand-alone spreadsheets for billing calculation which requires substantial, specialized training for Senior Customer Service Representatives,
More cross training of system users and support personnel, which improves billing reliability,
Automation of quality control mechanisms and improved database management and maintenance, and
Automated bill generation and a common bill format that approximates Con Edison’s bill format and design for all other Con Edison customers’ bills.
In addition, automation enables greater flexibility for the development and modification of billing processes in response to future regulatory and/or legislative mandates. It will also allow the Company to be responsive to the evolving needs and interests of the corporate/industrial customer segment as well as residential customers interested in distributed generation. The need for specialized billing and accessibility of energy usage information is becoming more crucial, and its criticality will expand with the development of the modern electric grid and associated customer engagement envisioned in the Public Service Commission’s Reforming the Energy Vision proceeding. Growth in net metering and other complex rates and programs is projected to continue steadily as the REV marketplace becomes established. As such, the continued use of off-system billing processes will not be a practical or sustainable solution.
EXHIBIT___(CO-17) PAGE 3 OF 4
3
In summary, continuation of the Off-System Billing project will enable the automation of the existing special rates/programs referenced and deliver a positive customer experience. It also enables the Company to meet future customer needs and prepare for new and/or modified rates/programs.
Supplemental Information:
Alternatives:
o The Company could continue to use manual off-system billing processes to bill customers taking service under certain rates and programs. As described above, reliance on manual processes increases the likelihood of billing errors and delays, and makes complex rates and programs difficult to support if there is substantial growth in customer participation.
o There is no alternative to making system upgrades to the CC&B platform. Upgrades are necessary to maintain system sustainability and vendor support.
Risk of No Action:
o As customer participation in these types of rates and programs grows, the Company would need to deploy additional human resources to manually bill these rates.
o Not completing the CC&B platform upgrade in 2016 would create risks to operation of the billing platform, jeopardizing bill generation and revenue collection.
Non-financial Benefits: Reduces the risk of inaccurate and delayed billing involved with manual bill processes; thereby positively affecting customer satisfaction.
Summary of Financial Benefits (if applicable) and Costs: N/A
Technical Evaluation/Analysis: For each rate or program being automated, a fit gap analysis will be performed to determine the most efficient and cost-effective platform for automation (i.e., CC&B or CSS).
Project Relationships (if applicable): N/A
Basis for Estimate: The estimates are based on the identification of high level requirements, a projection of the effort involved, and comparison with similar efforts within the Company.Total Funding Level ($000):
Historical Spend
Actual 2011 Actual 2012 Actual 2013
$2,337 $1,975 $1,610 $1,559 $994
Historical Elements of Expense
(Historical EOE breakout will only be completed for Steam projects/programs of $500 thousand or more and, for all other organizations, projects/programs of $1million or more.)
EOE Actual 2011 Actual 2012 Actual
4
Labor $312 $298 $239 $383 $349
M&S
A/P $1,841 $1,441 $1,160 $915 $365
Other $280
Overheads $184 $236 $211 $261
Total $2,337 $1,975 $1,610 $1,559 $994
Request ($000):
Request 2016
Request 2017
Request 2018
Request 2019
Request 2020
$1,000 $1,000 $1,000 $1,000 $1,000
Request by Elements of Expense
EOE 2016 2017 2018 2019 2020
Labor $308 $311 $311 $311 $311
M&S
A/P $476 $504 $504 $534 $548
Other
Overheads $216 $185 $185 $155 $141
Total $1,000 $1,000 $1,000 $1,000 $1,000
EXHIBIT___(CO-18)
Project/Program Title Off-System Billing O&M Project Manager Janet Nevin
Hyperion Project Number N/A Status of Project Ongoing Estimated Start Date 2013 Estimated Completion Date Ongoing Work Plan Category Strategic
Work Description:
Currently, due to the complexities involved in the billing process, the Company utilizes a number of off-system billing processes outside of the Customer Service System (CSS) to bill customers taking service under certain rates and programs. Managing and billing these customers involves manual processes and/or systems other than the CSS. The Company is in the process of automating complex billing by migrating such bills to automated billing platforms which include the Customer Care & Billing (CC&B) application and the CSS. As of December 31, 2015, automation of electric standby service rates, excess distribution facilities charges, gas penalty billing, and gas distributed generation rates have been implemented.
Automated processes to bill residential and small commercial net metering customers were developed in 2015 with implementation projected for first quarter 2016.
The CC&B application was moved from a physical environment to a virtual host environment in February 2015 for business sustainability purposes. The move was necessary because the former physical server provided limited resources to perform daily processing, and was reaching end of life. The change to a virtual environment allows the Company to add more memory or storage capacity quickly when needed to optimize performance of the system.
To continue using the virtual host environment, the Company will experience incremental expenses in the form of annual database licensing fees, beginning in 2016. Payment of the fees keeps the Company in compliance with the vendor’s terms for use of the virtual host environment. It will also ensure that the software and hardware are adequately maintained to support continued reliable performance.
In addition, the Off-System Billing project requires a complete version upgrade to the CC&B application in 2016 (see the Off-System Billing capital white paper for additional information). This version upgrade necessitates a change to the software that generates associated customers’ bills (termed ‘bill display software’) because the current bill display software is incompatible with the aforementioned CC&B upgrades taking place in 2016. There Company will incur annual licensing fees associated with this software, so that the system will continue to function as required.
Justification Summary:
The continued migration of off-system billing applications to automated billing platforms allows for the elimination of the manual billing processes required to serve customers under existing complex rate structures and special programs. Billing automation work proposed in this program may also address new rates and programs that are introduced as a result of the REV proceeding, depending on the billing requirements associated with those programs.
2
By funding the annual database licensing fees for the CC&B virtual host environment, the Company will remain in compliance with the vendor’s terms and keep the software and hardware adequately maintained and up-to-date with vendor improvements. This will support continued reliable performance of the CC&B platform.
Changing the bill display software to a version that is compatible with the 2016 CC&B upgrades will allow the Company to continue to bill customers on complex rates and programs. Payment of licensing fees for the new bill display software is required to maintain vendor support.
Supplemental Information:
Alternatives:
o Fall out of compliance with vendor software maintenance requirements, which could potentially lead to a situation where Con Edison experiences system failure and cannot rely on vendor support to identify and fix the problem.
o The Company could continue to use manual off-system billing processes to bill customers taking service under certain rates and programs. As described above, reliance on manual processes increases the likelihood of billing errors and delays, and makes complex rates and programs difficult to support if there is substantial growth in customer participation.
Risk of No Action:
o As customer participation in these types of rates and programs grows, the Company would need to deploy additional human resources to bill these rates.
o The lack of maintenance and support of the software and hardware associated with the customer care and billing platform would create risks to operation of the billing platform, jeopardizing bill generation and revenue collection.
Summary of Financial Benefits and Costs: N/A
Technical Evaluation/Analysis: N/A
Project Relationships (if applicable): N/A
Basis for Estimate: The estimate is based on the annual licensing fees required for the software platforms used for Off System Billing, the frequency of those renewals, and a 3% escalation.
Total Funding Level ($000) – O&M:
Historical Spend:
Actual 2011 Actual 2012 Actual 2013 Actual 2014 Historic Year
(O&M only)
Forecast 2015
N/A N/A N/A N/A $18 $18
EXHIBIT___ (CO-18) PAGE 3 OF 3
3 Historical Elements of Expense:
EOE Actual 2011 Actual 2012 Actual 2013 Actual 2014 Historic Year
(O&M only)
Forecast 2015
Labor
M&S
A/P $18 $18
Other Overheads
Total N/A N/A N/A N/A $18 $18