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Delivering a fair bill for heat network customers
At the start of this year, Ofgem officially took on the role of regulator for the heat network space. This means that for the first time, customers of heat networks will be entitled to certain rights other billpayers have long taken for granted. These include a ‘fair’ price, tariff transparency and accurate billing based on actual meter data.
The change was a long time coming and reflected the need to formalise consumer protection in a sector that is expected to account for a far greater share of home heating in the coming years.
It is a marker of how little scrutiny there is of heat networks that no one is entirely sure how many customers are covered but educated assumptions put the figure at between 500,000 and 900,000. The Department for Energy Security and Net Zero (DESNZ) expects these communal networks to provide up to 20% of the country’s heat by 2050.
The long-awaited protections began in January this year, with Ofgem acting as the watchdog across England, Scotland and Wales. With previous cases of customers being issued with unexplained monthly bills or facing energy prices rises of up to 450% following the increase in gas prices, the new rules are designed to ensure customers receive cleared itemised bills.
Heat networks will now be obliged to meet Ofgem requirements of providing accurate meter data, timely billing, transparent communication, detailed reporting and consistent customer experiences.
Other protections will see suppliers required to meet standards of conduct on how they treat consumers and provide them with a heat supply agreement, similar to a contract, setting out clear terms and conditions. Vulnerable customers will have to be added to a priority services register and will be protected from forced installation of prepayment meters.
Overall heat networks will have to provide more transparency to their customers about how they operate and who to contact if they have a complaint or maintenance issue. The practical reality of ensuring compliance for heat networks are likely to prove challenging for the industry to follow and resource heavy for Ofgem to enforce.
Much of the new obligations follows the voluntary agreements set by consumer body Heat Trust – but implementing efficient billing systems is no simple task.
So, how can operators go about making these changes?
Delivering a fair bill for heat network customers
At the start of this year, Ofgem officially took on the role of regulator for the heat network space. This means that for the first time, customers of heat networks will be entitled to certain rights other billpayers have long taken for granted. These include a ‘fair’ price, tariff transparency and accurate billing based on actual meter data.
The change was a long time coming and reflected the need to formalise consumer protection in a sector that is expected to account for a far greater share of home heating in the coming years.
It is a marker of how little scrutiny there is of heat networks that no one is entirely sure how many customers are covered but educated assumptions put the figure at between 500,000 and 900,000. The Department for Energy Security and Net Zero (DESNZ) expects these communal networks to provide up to 20% of the country’s heat by 2050.
The long-awaited protections began in January this year, with Ofgem acting as the watchdog across England, Scotland and Wales. With previous cases of customers being issued with unexplained monthly bills or facing energy prices rises of up to 450% following the increase in gas prices, the new rules are designed to ensure customers receive cleared itemised bills.
Heat networks will now be obliged to meet Ofgem requirements of providing accurate meter data, timely billing, transparent communication, detailed reporting and consistent customer experiences.
Other protections will see suppliers required to meet standards of conduct on how they treat consumers and provide them with a heat supply agreement, similar to a contract, setting out clear terms and conditions. Vulnerable customers will have to be added to a priority services register and will be protected from forced installation of prepayment meters.
Overall heat networks will have to provide more transparency to their customers about how they operate and who to contact if they have a complaint or maintenance issue. The practical reality of ensuring compliance for heat networks are likely to prove challenging for the industry to follow and resource heavy for Ofgem to enforce.
Much of the new obligations follows the voluntary agreements set by consumer body Heat Trust – but implementing efficient billing systems is no simple task.
So, how can operators go about making these changes?
Legacy systems fail to keep pace
For heat network Watkins Energy, the ‘one-size fits all’ legacy billing solution it was using was not keeping pace with Heat Trust standards, and in preparing for Ofgem regulation they knew it was even more vital to ensure they were meeting the best possible consumer protection standards.
Paul Keen, director of operations at Watkins Energy, says: “For us, it was really important that we do everything exactly how it should be done. The software we were using for metering and billing at the time didn't tick some of the boxes, and the development cycle was just too slow. There were times when we thought that'll need to be done for regulation. And they had a different viewpoint of what the regulation was going to be.”
While many heat networks choose to develop their own in-house billing software, Watkins Energy decided a Microsoft Dynamics 365 platform would give them the usability and reliability customers and regulators required. The team chose SkyBill for the added flexibility of a platform that could adapt to their specific needs.
Watkins Energy is now the UK’s second-largest Heat Trust-compliant supplier and Keen says moving to SkyBill has significantly contributed to this success. He adds that the company is now well prepared for the new Ofgem-regulated market and is confident that its billing partner can move at the pace required for the evolving regulatory landscape.
By using an established platform it is able to focus on its core business and rely on the shared knowledge when it comes to meeting legal requirements.
“Watkins Energy focuses on heat supply and metering services, not software development,” says Keen. “Developing an in-house platform would require significant investment, which would divert resources from core business operations.”
He says the platform allows for tailored solutions without the need for extensive development, making it a more efficient choice.
Keen explains:“We've been self-regulating since day one and the incoming regulation is predominantly adopting most of the Heat Trust rules.
“But I imagine for other heat networks not yet regulating, adopting a platform that you know is keeping abreast of anything that could be coming in, works for everyone. I can suggest good ideas that benefit us to SkyBill and they can implement them for the wider audience.”
One example is Watkins Energy’s need for a smoother transition for void periods when units were vacant. Keen says SkyBill’s system also makes it easier to manage more complicated networks with a mixture of landlords, tenants and owner-occupiers all within the same site.
Taking over networks, Keen has come face to face with the pitfalls of some other billing solutions.
“We do end up interacting with output of other people’s systems because we've been taking over quite a lot of sites from other people,” he says. “When I say, ‘right, we're taking over 500 properties from you, what's everyone's final balances? Who are the people that live there?’, the data that comes out is quite a mishmash for quality.”
Legacy systems fail to keep pace
For heat network Watkins Energy, the ‘one-size fits all’ legacy billing solution it was using was not keeping pace with Heat Trust standards, and in preparing for Ofgem regulation they knew it was even more vital to ensure they were meeting the best possible consumer protection standards.
Paul Keen, director of operations at Watkins Energy, says: “For us, it was really important that we do everything exactly how it should be done. The software we were using for metering and billing at the time didn't tick some of the boxes, and the development cycle was just too slow. There were times when we thought that'll need to be done for regulation. And they had a different viewpoint of what the regulation was going to be.”
While many heat networks choose to develop their own in-house billing software, Watkins Energy decided a Microsoft Dynamics 365 platform would give them the usability and reliability customers and regulators required. The team chose SkyBill for the added flexibility of a platform that could adapt to their specific needs.
Watkins Energy is now the UK’s second-largest Heat Trust-compliant supplier and Keen says moving to SkyBill has significantly contributed to this success. He adds that the company is now well prepared for the new Ofgem-regulated market and is confident that its billing partner can move at the pace required for the evolving regulatory landscape.
By using an established platform it is able to focus on its core business and rely on the shared knowledge when it comes to meeting legal requirements.
“Watkins Energy focuses on heat supply and metering services, not software development,” says Keen. “Developing an in-house platform would require significant investment, which would divert resources from core business operations.”
He says the platform allows for tailored solutions without the need for extensive development, making it a more efficient choice.
Keen explains:“We've been self-regulating since day one and the incoming regulation is predominantly adopting most of the Heat Trust rules.
“But I imagine for other heat networks not yet regulating, adopting a platform that you know is keeping abreast of anything that could be coming in, works for everyone. I can suggest good ideas that benefit us to SkyBill and they can implement them for the wider audience.”
One example is Watkins Energy’s need for a smoother transition for void periods when units were vacant. Keen says SkyBill’s system also makes it easier to manage more complicated networks with a mixture of landlords, tenants and owner-occupiers all within the same site.
Taking over networks, Keen has come face to face with the pitfalls of some other billing solutions.
“We do end up interacting with output of other people’s systems because we've been taking over quite a lot of sites from other people,” he says. “When I say, ‘right, we're taking over 500 properties from you, what's everyone's final balances? Who are the people that live there?’, the data that comes out is quite a mishmash for quality.”
Transparency on bills
Another benefit for Watkins Energy, and certainly a priority for the regulator, is providing clarity and reducing complaints for customers.
Keen says: “It’s an optimised webpage rather than an app, so it always works, even if your phone can’t get an app. And if a customer has a query we can guide them to the information they need and they can see their usage or tariff change.
Keen explains that for customers to understand that they are being fairly billed they need to be able to see accurate data on their usage levels and times. Having a clear interface on a billing platform simplifies the process.
As a fully integrated customer platform, SkyBill says it can help heat networks raise their game to meet the new standards and help improve the experience for heat networks customers across the country.
SkyBill chief executive Maris Drone explains what sets it apart from other billing platforms.
“We are very responsive,” he says. “We listen to the client and if the client wants to make some changes, we can do that. And not just after years, but in some reasonable time.
“Our price performance ratio is also huge compared to our competitors. Other platforms can be quite expensive and we offer very similar functionality at a better price range.”
SkyBill is a cloud-based CIS & billing platform built on Microsoft Dynamics 365 for utilities and property managers worldwide. It offers comprehensive out-of-the-box functionality but also ample integration options that allows SkyBill to be linked with other systems.
“The reality is that most legacy systems can't cope,” says Maris Drone. “In fact, a lot of utility companies are still working with a set of different systems; one for customer accounts, one for billing, one for financial management. This is highly inefficient because it's time consuming, requires lot of manual labour and is very complex and expensive especially for small and mid-sized companies not to mention startups.
“SkyBill covers the entire business process and consumer life cycle; including customer onboarding and off-boarding, meter reading and managing tariffs, products, contracts, billing and invoicing CRM as well as payment and debt management.
“It is highly flexible and fully customisable, which allows SkyBill to scale according to demand and meet requirements of the industry.”
Explaining how their platform can help heat networks in light of the new regulations, Skybill chief technical officer Ernests Lipko says: “In principle, the heat network is a monopoly. With most properties you can choose your energy supplier. You can decide you don't like a certain supplier, whether because of the tariff, or maybe poor customer service. But heat network customers don’t have that option. That’s why it’s so important the levels of service and response are transparent.
“The bill itself has to be self-explanatory. It has to have all the actual reads and the types of reads. If you use estimated, it should clearly say it’s estimated and there should be those comparison graphs.
“In theory, you could do that manually, but imagine if you want to scale as a business? You can't, because you need a lot of people doing that. You need some platform that helps you to scale and that would automate those processes.”
With the government wanting to implement heat network zones in towns and cities across England as a lowest-cost solution for decarbonising heat, an additional benefit of a clear and integrated platform is being able to track efficiency.
“For the heat networks, it's important to be efficient,” says Lipko. SkyBill’s platform allows networks to analyse that efficiency. “What are the flow temperatures? Outflow, inflow differences, down to each individual unit,” he adds.
As the further detail of the regulations emerge, SkyBill will be able to adapt its platform to meet customer need.
“We are flexible, it’s how we position ourselves. It's a modular solution, based on Microsoft Dynamics, 365, you can start small and scale and add new modules.
“It's a core of billing, meter to cash, but we can extend it to customer service, field service and do it gradually. You can gradually add modules, and you don't need invest a lot of money in the upfront.”
Utility customer portal
SkyBill utility platform dashboard
“We are very responsive. We listen to the client and if the client wants to make some changes, we can do that.”
Maris Drone, chief executive, SkyBill
Transparency on bills
Another benefit for Watkins Energy, and certainly a priority for the regulator, is providing clarity and reducing complaints for customers.
Keen says: “It’s an optimised webpage rather than an app, so it always works, even if your phone can’t get an app. And if a customer has a query we can guide them to the information they need and they can see their usage or tariff change.
Keen explains that for customers to understand that they are being fairly billed they need to be able to see accurate data on their usage levels and times. Having a clear interface on a billing platform simplifies the process.
As a fully integrated customer platform, SkyBill says it can help heat networks raise their game to meet the new standards and help improve the experience for heat networks customers across the country.
SkyBill chief executive Maris Drone explains what sets it apart from other billing platforms.
“We are very responsive,” he says. “We listen to the client and if the client wants to make some changes, we can do that. And not just after years, but in some reasonable time.
“Our price performance ratio is also huge compared to our competitors. Other platforms can be quite expensive and we offer very similar functionality at a better price range.”
SkyBill is a cloud-based CIS & billing platform built on Microsoft Dynamics 365 for utilities and property managers worldwide. It offers comprehensive out-of-the-box functionality but also ample integration options that allows SkyBill to be linked with other systems.
“The reality is that most legacy systems can't cope,” says Maris Drone. “In fact, a lot of utility companies are still working with a set of different systems; one for customer accounts, one for billing, one for financial management. This is highly inefficient because it's time consuming, requires lot of manual labour and is very complex and expensive especially for small and mid-sized companies not to mention startups.
“SkyBill covers the entire business process and consumer life cycle; including customer onboarding and off-boarding, meter reading and managing tariffs, products, contracts, billing and invoicing CRM as well as payment and debt management.
“It is highly flexible and fully customisable, which allows SkyBill to scale according to demand and meet requirements of the industry.”
Explaining how their platform can help heat networks in light of the new regulations, Skybill chief technical officer Ernests Lipko says: “In principle, the heat network is a monopoly. With most properties you can choose your energy supplier. You can decide you don't like a certain supplier, whether because of the tariff, or maybe poor customer service. But heat network customers don’t have that option. That’s why it’s so important the levels of service and response are transparent.
“The bill itself has to be self-explanatory. It has to have all the actual reads and the types of reads. If you use estimated, it should clearly say it’s estimated and there should be those comparison graphs.
“In theory, you could do that manually, but imagine if you want to scale as a business? You can't, because you need a lot of people doing that. You need some platform that helps you to scale and that would automate those processes.”
With the government wanting to implement heat network zones in towns and cities across England as a lowest-cost solution for decarbonising heat, an additional benefit of a clear and integrated platform is being able to track efficiency.
“For the heat networks, it's important to be efficient,” says Lipko. SkyBill’s platform allows networks to analyse that efficiency. “What are the flow temperatures? Outflow, inflow differences, down to each individual unit,” he adds.
As the further detail of the regulations emerge, SkyBill will be able to adapt its platform to meet customer need.
“We are flexible, it’s how we position ourselves. It's a modular solution, based on Microsoft Dynamics, 365, you can start small and scale and add new modules.
“It's a core of billing, meter to cash, but we can extend it to customer service, field service and do it gradually. You can gradually add modules, and you don't need invest a lot of money in the upfront.”
Utility customer portal
SkyBill utility platform dashboard
“We are very responsive. We listen to the client and if the client wants to make some changes, we can do that.”
Maris Drone, chief executive, SkyBill
Wider benefits
When it comes to working with water and energy retailers more generally, SkyBill focuses on simplifying interactions between end consumers, the market and the network.
SkyBill tech supports customer switching of energy supplier, integrating effectively with existing utility IT platforms. It also allows greater integration of distributed energy resources and introduction of new tariff regimes, such as time-of-use tariffs.
“We work with retailers that require support for interaction with the market and with the grid,” says Lipko. “They receive messages about consumption from the grid, about meters, meter placements, for example.
“If, say, your customer is going to another supplier, or if you gain a new customer, then you need to send this message to the grid. It's quite complex with electricity.”
Maris Drone concludes: “The utility industry is more dynamic today than ever before and it will continue to undergo fundamental changes across all sectors over coming years and decades. Trends such as evolving business models and shifting consumer needs affect utility companies at every level, and that includes the billing side of it. Managing your customer segments, integrating new types of service, and meeting modern consumer expectations are all challenges that today utility billing systems must be able to grapple with. That's on top of basic requirements of being able to scale in response of growing customer numbers.
“That's why we created SkyBill. It is a smarter utility management and billing software that simplifies, automates and integrates with various billing processes into a single end-to-end solution.”
Wider benefits
When it comes to working with water and energy retailers more generally, SkyBill focuses on simplifying interactions between end consumers, the market and the network.
SkyBill tech supports customer switching of energy supplier, integrating effectively with existing utility IT platforms. It also allows greater integration of distributed energy resources and introduction of new tariff regimes, such as time-of-use tariffs.
“We work with retailers that require support for interaction with the market and with the grid,” says Lipko. “They receive messages about consumption from the grid, about meters, meter placements, for example.
“If, say, your customer is going to another supplier, or if you gain a new customer, then you need to send this message to the grid. It's quite complex with electricity.”
Maris Drone concludes: “The utility industry is more dynamic today than ever before and it will continue to undergo fundamental changes across all sectors over coming years and decades. Trends such as evolving business models and shifting consumer needs affect utility companies at every level, and that includes the billing side of it. Managing your customer segments, integrating new types of service, and meeting modern consumer expectations are all challenges that today utility billing systems must be able to grapple with. That's on top of basic requirements of being able to scale in response of growing customer numbers.
“That's why we created SkyBill. It is a smarter utility management and billing software that simplifies, automates and integrates with various billing processes into a single end-to-end solution.”
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