Customizing Electronic Billing

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Customizing Electronic Billing Payment Options

• 2008 AGA/EEI Customer Services Conference
  Exposition

Mark Shaver Director Strategic Customer
Accounts March 31, 2008
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The Challenge

• Customer Bill Payment Evolution
• New technology options effecting both channel
  method
• Channels Online (bank/direct/consolidator),
  Mail, Phone (IVR/CSR), Mobile, Walk-In, Direct
  Debit, Kiosk, Other Electronic
• Methods Cash, Check, ACH, Credit/Debit Card,
  Wire/EFT
• Evolving customer preferences requirements
• Want convenient/flexible/reliable options.
• Preferences differ vastly by customer segment.
• Changing business considerations
• Increasing complexity for processing payments and
  handling customer payment calls.
• Electronic payments can accelerate cash flows and
  decrease days sales outstanding (DSO), but may
  impact check processing vendor arrangements.

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Washington Gas Light Company

• Washington Gas Light Company Highlights
• Provides natural gas service to about 1.1 Million
  customers
• Serves the fourth largest regional economy in the
  nation
• Originally received charter from the US Congress
  in 1848 to serve the District of Columbia
• A subsidiary of WGL Holdings, Inc.

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Washington Gas Light Company

• Washington Gas Billing Payment Highlights
• Creates and delivers more than 13 Million bills
  per year
• Receives and processes almost 11 Million payments
  per year
• Washington Gas Customer Segments
• 1,005,000 Residential Accounts
• 80,000 Commercial Accounts (minimal industrial
  base)
• 10,000 Government Accounts
• Federal Government (GSA, Military, Others)
• District of Columbia
• Three Countries that are in the Top 60 Largest in
  the Nation

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Electronic Payment Growth

• 2007 Federal Reserve Payments Study
• 6.4 annual decrease in check payment
  transactions
• 12.4 annual increase in electronic payment
  transactions
• ACH transactions increasing 18.6
• Debit card transactions increasing 17.5
• Credit card transactions increasing 4.6
• Other Studies
• 74 of US online households pay at least one bill
  online (Checkfree).
• Consumer bill payment via check, now less than
  50 (Aite Group).

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Washington Gas Electronic Payments

• Continued Growth in Electronic Payments

Plus more than 70 of our checks are now
converted to electronic (ARC)
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Washington Gas Electronic Payments

• Current Status
• Electronic Payments
• Currently exceeding 45 of customer payments
  received electronically.
• Projecting to pass 50 within the next 12 months
• More than 70 of checks are converted to
  electronic (Accounts Receivable Conversion (ARC))
• Electronic Billing
• Less options currently available, but plans to
  add
• Summary/Group Billing
• More EBPP Options (eligibility changes, trial
  period)
• Currently only at 8 adoption

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Washington Gas Electronic Payments

• Electronic Payments Challenge One Size Does Not
  Fit All
• Significant differences by segment
• Residential
• Want low/no cost, lots of banks, intuitive, easy
  with mistake safety nets.
• Want a variety of payment channels and methods.
• Commercial
• Want a single due date and flexibility to use
  their existing payment processes/systems.
• Data integrity and keeping up with the accounts
  that are active is critical.
• Government
• Funds for technology can be limited, often want
  custom solutions.
• Data integrity and active account list is also a
  challenge.

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Washington Gas Electronic Payments

• Customer Segment Usage Comparison

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Washington Gas Electronic Payments

• Customer Segment Usage Comparison

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Electronic Payment Programs

• Washington Gas Electronic Payment Options Overview

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Electronic Payment Programs

• Commercial Program Example
• Problem Encountered
• Automatic Name Change Program (ANCP) allows
  multifamily accounts to automatically change to
  the property management (PM) company when the
  tenant moves out.
• PM companies have difficulty keeping track of
  what accounts are currently in their name, versus
  a tenant.
• Bills go unpaid, simply because the new tenant
  never set up service and the PM ignores the bill.
• Solutions Being Pursued
• Online Multiple Account Manager for medium
  customers
• Summary/Group Billing for large customers (later
  this year)
• From 21 due dates/month to just a few
• Electronic billing and payments

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Electronic Payment Programs

• Commercial/Government Program Example
• Problem Encountered
• Existing residential electronic payment programs
  didnt meet requirements of larger commercial and
  government customers.
• Large customers paid the way that worked for
  them, often resulting in wires or large checks
  without account information, customer support
  issues, and complaints.
• Solution Launched
• A Web Portal that allows PMs to view all their
  accounts, including bills.
• Allows the PMs to pay their accounts online or
  download the billing information for
  customer-initiated electronic funds transfer
  (EFT).

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Electronic Payment Programs

• Government Program Example
• Low Income Energy Program Enrollment
• Web portal for energy assistance agencies
• Allows them to review customer information and
  make energy assistance grants.
• Followed by electronic payment and payment file
  for upload into the CIS.
• Benefits Gained
• Estimated annual savings of 120,000 inn labor
  and data entry costs. At least 100,000 in
  avoided telephone costs.
• Faster payment matching and posting to customer
  accounts.
• Fewer field turn-offs.

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Electronic Payment Programs

• Government Program Example 2
• Problem Encountered
• Local government having difficult time approving
  and paying bills in a timely manner.
• When paid, payments often dont match bills, or
  account information just missing.
• Results in significant late fees for the
  customer, and significant labor for WG to manage
  these accounts.
• Solution In Works
• Creation of a custom budget program, including
  electronic billing and payments.
• Send usage data and customer reports each month
  for review and approval.
• Payment office pays budget each month (amounts
  reviewed quarterly).

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Electronic Payment Programs

• Considerations
• Costs infrastructure, programming, per
  transaction, labor to help fix mistakes customers
  make.
• Savings reduced processing, reduced days sales
  outstanding, fewer credit actions. Sometimes
  equipment and programs can be considered capital
  investment for rate making purposes, so involve
  your rate design folks in understanding a build
  vs. buy vs. rent equation.
• Must customize electronic billing, payment and
  other self-services to the target audience.
• Customers are slower to adopt electronic billing
  if not tightly tied to electronic payment
  options.
• Be prepared for discussions with your check
  processing provider about impact on them
  overall reduction in check handling will reduce
  their revenue and should be considered in
  contract negotiations.

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Electronic Payment Programs

• Considerations
• Multiple payment channels and methods can be
  difficult to tie together for customer support
  purposes.
• What you will pay and what you expect customers
  to pay, and understand your regulatory concerns
  about cost to pay.
• When will you various payment files and how you
  communicate that to your customers review the
  regulatory rules and make sure the system
  processing and customer education makes sense.

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Electronic Payment Programs

• Industry Trends
• Attempting to move electronic payments to
  electronic bills
• Increased demand for EBPP flexibility
• New EBPP options
• Email bill delivery payment
• Bill delivery payment via the ACH (EBIDS)
• Increased demand for card payment options,
  especially recurring credit card payments
• No-fee credit and debit card payments
• More mobile banking and payments

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Electronic Payment Programs

• Whats Next for Washington Gas
• Simplifying/automating the auto-pay program
• New summary/group billing program
• More online bill analysis tools to provide
  incentive
• More customized programs for specific commercial/
  government customers
• Expanding EBPP with other processors/customers
• Investigating walk-in and field payment options

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For more information, contact Mark
Shavermshaver_at_washgas.com703-750-7644