The Infosys Utilities Blog seeks to discuss and answer the industry’s burning Smart Grid questions through the commentary of the industry’s leading Smart Grid and Sustainability experts. This blogging community offers a rich source of fresh new ideas on the planning, design and implementation of solutions for the utility industry of tomorrow.

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February 22, 2012

The rain falls mostly on the plains ....and not where we need it

The news this week that many areas of the UK are in drought and at high risk of needing to apply water restrictions is likely to leave many customers asking the usual question "So where does all the rainwater go?". The rainfall charts do show there has been reduced rainfall for a number of years and this accumulative affect is really starting to store up issues. However, I am sure many customers would still ask what can be done to more effectively capture and utilise the rain that does fall.

Of course, supply in the form of extraction of water from the various types of resources such as rivers, reservoirs, or groundwater from boreholes is only one part of the equation. The increasing demand from customers is the other, and in times of water restrictions the demand side becomes the primary area of focus for the water company to maintain its water balance. We are the seeing creative ways to deal with drought such as the  abstractions or water movements, such as using the River Medway which is itself very low to re-supply one of the reservoirs in Kent. However, this is not a sustainable activity and also often requires regulatory approval, e.g. the Environment Agency in the UK.

So, in addition to trying to predict rainfall which is notoriously difficult, the focus needs to turn to reducing demand through various water efficiency measures. It is well recognised that many of the water companies have been progressing initiatives in these areas for many years and that there are some notable examples where the overall demand has remained static even though customer numbers have increased by up to 20% in some regions.

With at least one of the UK national papers repeating water saving measures applied in 1976, such as sharing baths and other garden initiatives, the time for a more holistic Integrated Water Management approach ultimately resulting in a long term sustainable solution may be coming sooner than many expect.

What could this approach look like and what are the opportunities and challenges? Well this is likely to be a topic for discussion at the Water UK City Conference which Infosys will be attending on the 1st March 2012 (http://www.water.org.uk/home/events/events-list/12th-annual-city-conference-2012 ) and one that I will continue to comment on in my next blogs.

 

February 6, 2012

My Bank My Utility

Since Thomas Edison lighted up the bulb, you cannot imagine a life without electricity. It has become as essential as the air to breath. All that said, you still find yourself frowning when you get your monthly electric bill. If the customer is on a fixed monthly income, it becomes even harder.
Utilities thus provide lot of relief to the customer to make payments easier. Payment arrangement can be made before the amount is actually due. Even extension can be requested on the due date of the payment. Budget Billing (Level payments plans) is also available where in a fixed amount is paid by the customer every month.
What if my utility can help me get a loan towards my electric bill?
Loans:  Say the customer is expecting hard time paying the bills for the next whole year. He can very well request for a loan towards his electric bill from the Utility. Utility might have to consider the loan returning capability of the customer, prior to disbursing the loan. The utility can charge an interest on the loan to the customer. The interest rate in this case should definitely be lesser than the late payment charge to make this option beneficial of the customer. This option would be more helpful to the customer in comparison to payment extensions as the number of extensions allowed would be lesser than the loan term period.
Savings Deposit: Now think of the opposite case, when the customer has a surplus inflow of cash. What if he could create a savings deposit with the utility just like his own bank? The utility would then draw money from the deposit periodically and get the monthly payments processed. This guarantees the returns for the utility. The utility in turn also provides interest on the remainder amount. To encourage customers to opt for this, the utility might also provide a lower rate or a discount to the customers in return of pre-payments of the bills. Internally the Utility can get associated with Investments agencies and pass the profits back to the customer. In this case though, the deposit has to be guaranteed. In case of loss in the investments, the customer cannot be penalized.
Challenges
All that said, there has to be regulations to prevent Utility from acting as a profitable organization.
• Unlike the financial sector, the profits needs to be public and the loss should be private. The customer's deposit needs to be protected and insured. Thus the utility might want some support from the government to ensure the same.
• The maximum limit of the deposit from the customer or the maximum loan to the customer should also be restricted to disallow customers from using the Utility as a full-fledged bank or an investment agency.
• The interest rate needs to be controlled and regulated. The investment should be low risk and low gain.
• There are certain regulations which require Utility to get approval prior to engaging in a business not related to Utility. It is also mandated that such non-utility businesses be kept separate from the regulated business. One such Act is the Public Utility Holding Company of 1935 (PUHC), also known as the Wheeler-Rayburn Act, passed by the United States Congress .
• The major piece of financial processing done by a Utility is payment processing. Once loan and deposits options are provided to the customer, it would be an overhead for the Utility to manage and control this. The business rules have to be defined to take care of exception like say pre-payment of loans or early withdrawal of the savings deposit etc. It would be a good option to partner with an investment agency/bank or outsource this piece. This should be seamless to the customer; otherwise it might be a hassle for the customer.
To summarize, this concept can be applied to all kind of utilities and service providers so that both the customer and the utility are in a win-win situation.