Utility internet transactions not matching early forecasts

By the OGJ Online Staff

HOUSTON, June 18 -- Many utilities are providing at least some customer services on line, but consumers don't seem eager to give up the telephone and the US Postal Service.

Just 2 years ago, utility managers were optimistic the internet would help them cut transaction costs much as ATMs helped banks reduce costs. But a recent survey by Chartwell Inc., Atlanta, Ga., revealed both utilities and their customers are moving more slowly than initially anticipated.

Nearly 61% of polled utilities' call centers are not web-enabled, according to the study, while the 39% that reported being web-enabled were still very limited in their internet capabilities. Jennifer Allen, managing editor of the new study, said some customers may be able to email the utility, but the companies don't have the ability to start and start and stop service, bill their customers, or set up credit on line automatically.

Utility call care center executives said customers' use of internet-based customer service options is virtually nonexistent at this stage of the game, Chartwell reported. But utilities have continued to integrate the internet into their customer service options, Allen said, banking on belief a significant number of consumers will go to the internet when contacting their local energy provider.

An earlier Chartwell study found nearly 18% of energy companies offered on line sign-up for service, while 27% were planning to institute this option. A small percentage of utilities providing internet-enabled customer service began offering "live chat" with customer service representative in 2000.

Optimistic forecast

Two years ago, Chartwell said it appeared electronic commerce was about to take off in 2000 with electricity and natural gas providers reporting plans to offer a variety of internet-based customer services. Chartwell forecast customers served by about half of US utilities would have access to services like electronic bill payment and on line sign-up for service by 2001.

It found electronic bill payment had the most growth potential among e-commerce options offered by energy companies. At that time, the service was offered by 10% of the country's energy companies, primarily large investor-owned utilities, while another 46% reported firm plans to launch the service.

A follow up report last year found 33% of 101 utilities reported offering or testing e-billing compared to only 10% in October 1999, and only 6% in March 1999. Another 31% reported plans to launch e-billing.

Persuading customers to use the new service was � and still is -- the biggest hurdle utilities face. Even though an on line transaction may cost a company $1 vs. $20 to do it by phone, customers are finding it's more convenient just to pick up the phone," Allen said. She said companies are still putting the technology "out there" in hopes customers "will adopt it over time."

Utilities and energy providers also have been cautious in using e-procurement though many are dabbling with the prospect, Chartwell said. Just a fraction of the $40 billion/year US utilities spend on goods is going toward internet-based transactions, a May report concluded.

However, more than 70% of large utilities' surveyed had used e-procurement to buy small items, such as office supplies. Some 24% of large utilities, or utilities with more than 500,000 customers, had used e-procurement for large industry-related items.