utility information pipeline

What’s it going to be…?

Over the course of the past few weeks, I’ve been involved with several customers moving to automated meter reading systems. One customer is migrating to an AMI system and currently reads in thousands of gallons and applies a multiplier to their readings to bill in gallons. Another is implementing an AMR system and reads and bills in hundreds of gallons.

Both are using a contractor to replace their meters, so I asked if either would be changing to reading and billing in gallons and explained this is the ideal time to make the switch.

Why read and bill in gallons?

I’ve written before about a compelling reason for changing to reading and billing in gallons, but with an AMI system, there is an even better reason. If you plan to offer an online portal so your customers can access their daily usage, as the customer moving to AMI does, do you want them to be able to reconcile their daily usage to their billed usage? If you do, then you will have to read and bill in gallons.

What does it take to make the change?

If, like the AMI customer, you are already billing in gallons, just reading in larger units, all you need to do is drop the multiplier on your readings and start reading meters to the gallon.

On the other hand, if you are like the AMR customer and reading and billing in the larger units, you will have to make some changes to your data. These data fields would need to be changed for each account in the system:

  • Previous reading
  • Current reading (if readings have been updated)
  • Usage (if readings have been updated)
  • Any usage history used to calculate the moving average
  • Moving average
  • Number of dials

What’s it going to be…?

If you’re making the change to an automated meter reading system and you’re not already reading and billing in gallons, you have two options – make the change or fall victim to the TTWWADI syndrome. What’s it going to be…?

Holiday spending money

If you missed it in a previous issue, I’m offering two $50.00 Visa gift cards, one to a new subscriber and one to a current subscriber who refers a new subscriber.If you refer a new subscriber between now and 11:59 pm on Thursday, November 15, you will be entered once for each referral. For referrals from outside your organization, you will be entered twice for each new subscriber. Be sure to remind the people you refer to enter your name on the Referred By line when they complete the subscription form.

Are you moving to automated meter reading?

Are you considering moving to an automated meter reading system and wondering how to get started? To find out, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how you could benefit from a business review.

Click here to subscribe to my free, bi-weekly email newsletter...

© 2018 Gary Sanders

How do your days of exposure compare?

The last Utility Information Pipeline analyzed the possible deposit refund or bad debt write-off, based on early results from the Days of Exposure tool featured a few issues ago. If you remember, Days of Exposure is the total number of days of service a customer ends up owing for if they are disconnected for non-payment and never reinstate service.

Last week, a customer asked how their utility’s Days of Exposure compared to others who used the tool, so this issue reports those results. Thus far, 50 people have completed the Days of Exposure tool, 45 of which bill monthly, and those results are represented by the graph below.

The Days of Exposure tool doesn’t ask who is completing the page, but it does log the values for each entry. This means I don’t know which utilities are represented by the results shown here:

Days of exposure

The Days of Exposure for those utilities that bill monthly ranged from 53 days (1.77 billing periods of exposure) to 116 days (3.87 billing periods of exposure). The mean (arithmetic average) is 81.72 and the median (equal number of smaller and larger values) is 79.

Analysis of results

As described in the last issue, 53 Days of Exposure is impressive! I consider anything under 60 to be excellent (in order to complete the delinquent process before billing again). Anything over 70 is generally indicative of areas that can be improved or policies that need to be changed.

Of the 45 responses shown above, three were under 60 days, 11 were between 60 and 70, and 31 were greater than 70, as shown below:

Reasons for a high number of days of exposure can include excessive time between reading meters and mailing bills, the number of days between the due date and when bills are actually delinquent, long periods between the delinquent date and a final notice, and extended time before finally disconnecting for non-payment.

If you haven’t already done so, I invite you to take a minute and click here to calculate your utility’s Days of Exposure to see how your utility performs and determine if you are at risk for a potential bad debt write-off.

Holiday spending money

If you missed it in a previous issue, I’m offering two $50.00 Visa gift cards, one to a new subscriber and one to a current subscriber who refers a new subscriber.If you refer a new subscriber between now and 11:59 pm on Thursday, November 15, you will be entered once for each referral. For referrals from outside your organization, you will be entered twice for each new subscriber. Be sure to remind the people you refer to enter your name on the Referred By line when they complete the subscription form.

Are your days of exposure as low as they could be?

Are your days of exposure as low as they could be? To find out, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how you could benefit from a business review.

Click here to subscribe to my free, bi-weekly email newsletter...

© 2018 Gary Sanders

Why isn’t your security deposit enough?

I’m intrigued by the early results from the Days of Exposure tool that was featured two issues ago. If you remember, Days of Exposure is the total number of days of service a customer ends up owing for if they are disconnected for non-payment and never reinstate service.

I had a suspicion most utilities don’t charge a sufficient security deposit, and the early results have confirmed that. Thus far, 40 people have used the Days of Exposure tool. Of those 40, seven don’t charge a security deposit, so this analysis is based on the remaining 33.

The Days of Exposure tool doesn’t ask who is completing the page, but it does log the values for each entry. This means I don’t know which utilities are represented by the results shown here:

Days of exposure

The Days of Exposure for those utilities that bill monthly ranged from 53 days (1.77 billing periods of exposure) to 116 days (3.87 billing periods of exposure). 53 Days of Exposure might be the lowest I’ve seen over the course of several years of using this calculation. In case you’re wondering, here’s how they arrived at 53 Days of Exposure:

Refunds vs. potential write-offs

As shown in the graph above, seven of the 33 responses (21.2%) charge a security deposit sufficient to cover their potential liability, based on their Days of Exposure. The remaining 26 responses (78.8%) risk potential write-offs ranging from a paltry fifty cents to a whopping $308.33!

Five of the 33 responses are within $10.00 of charging a security deposit that exactly covers their potential liability. Of these, two are refunds – $2.00 and $8.33 – and the other three are potential write-offs of $.50, $1.49, and $6.00. Kudos to these five utilities for doing a stellar job of determining their security deposit!

If you haven’t already done so, I invite you to take a minute and click here to calculate your utility’s Days of Exposure and determine if you are at risk for a potential bad debt write-off.

Holiday spending money

If you missed the last issue, I’m offering two $50.00 Visa gift cards, one to a new subscriber and one to a current subscriber who refers a new subscriber. If you refer a new subscriber between now and 11:59 pm on Thursday, November 15, you will be entered once for each referral. For referrals from outside your organization, you will be entered twice for each new subscriber. Be sure to remind the people you refer to enter your name on the Referred By line when they complete the subscription form.

Are your days of exposure as low as they could be?

Are your days of exposure as low as they could be? To find out, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how you could benefit from a business review.

Click here to subscribe to my free, bi-weekly email newsletter...

© 2018 Gary Sanders

Want some extra holiday spending money?

Would you like a little extra spending money this holiday season?

As a way of encouraging more people to subscribe to the Utility Information Pipeline, I’m offering two $50.00 Visa gift cards, one to a new subscriber and one to a current subscriber who refers a new subscriber.

I will draw the winning entries on Friday, November 16 (in time to get the gift cards to the winners before Black Friday!) and will announce the winners in the November 20 Utility Information Pipeline.

New subscribers

If you subscribe between now and 11:59 pm on Thursday, November 15, you will automatically be entered in a drawing for one of the gift cards. If you are referred by someone, be sure to enter their name on the Referred By line of the subscription form.

Referrals

If you refer a new subscriber between now and 11:59 pm on Thursday, November 15, you will be entered once for each referral. For referrals from outside your organization, you will be entered twice for each new subscriber. Be sure to remind the people you refer to enter your name on the Referred By line when they complete the subscription form.

Days of exposure

If you missed the last issue, it included a link to a new Days of Exposure tool I’ve created. Days of Exposure is the total number of days of service a customer ends up owing for if they are cut off for non-payment and never reinstate service.

If you haven’t already done so, please take a minute and click here to calculate your utility’s Days of Exposure and determine if you are at risk for a potential bad debt write-off.

Webinar this morning

If you’re reading this first thing on Tuesday morning, you still have time to register for a webinar from the Environmental Finance Center at UNC this morning at 10:00 am EST. The webinar is entitled “Setting Financial Targets for Water Utilities – Beyond the Budget”. You can learn more about the webinar and register to attend by clicking here.

Do you have an idea for a future Utility Information Pipeline?

Do you have an idea for a future Utility Information Pipeline newsletter? If so, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to let me know.

Click here to subscribe to my free, bi-weekly email newsletter...

© 2018 Gary Sanders

Calculate your days of exposure

If you’ve been a Utility Information Pipeline reader from the early days, you know I’ve written about days of exposure in one of the earliest issues and revisited itagain three years ago.

I feel like this is an important enough topic to not only write about it again, but to also create a tool so you can calculate your days of exposure. First, let’s review how days of exposure are calculated…

Components of days of exposure

Days of exposure is the total number of days of service a customer ends up owing for if they are cut off for non-payment and never reinstate service. It takes into account six specific time periods:

The sum of these six values results in days of exposure. Dividing days of exposure by the number of days in the billing period (days between meter readings) yields periods of exposure. Multiplying the periods of exposure by the average residential utility bill and then subtracting the security deposit arrives at the potential bad debt write-off (or deposit refund if the security deposit is adequate).

In my experience, taking steps to reduce days of exposure is an exercise that would benefit nearly all utilities, so I’ve developed an online tool to calculate days of exposure.

Calculate your days of exposure

If you’ve attended my Improving Revenue Collections for Utilities presentation at a utility conference, you’ve had the opportunity to complete a days of exposure worksheet. If not, or if you’ve forgotten what yours was, I’ve created an online, interactive days of exposure calculator.

You enter the number of days in each of the six stages, plus your average residential utility bill and residential security deposit, and the tool will calculate your days of exposure and potential bad debt write-off or deposit refund. To calculate your days of exposure, please click here.

Are you surprised by your days of exposure?

Are your days of exposure excessive or are you left with a potential bad debt write-off? If so, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could help evaluate how to improve your days of exposure.

Click here to subscribe to my free, bi-weekly email newsletter...

© 2018 Gary Sanders

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Gary Sanders

I am the Senior Consultant with Logics, LLC in Raleigh, North Carolina. I have over 35 years experience developing and implementing utility billing and financial software and consulting with utilities and municipalities. My bi-weekly email newsletter draws from my experience in working with over 200 utilities and local governments to offer insight into how utilities can improve operations and better serve their customers. If you have a comment or a suggestion for a future email, please contact me by calling 919-232-2320 or sending an email to gsanders@logicssolutions.com



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