In 1995, Australia introduced a staggered timetable for electricity deregulation that gave customers freedom to select their energy provider. Australia's five-year program to achieve competition in all sectors of the market started with the large commercial and industrial (C&I) customers, to be followed by staged implementation that concluded with residential customers.

It was in 1995 that Ophir Electricity, an electricity retailer in New South Wales, selected the Peace Customer Information System (CIS) to manage its 22,000 C&I and residential customers. When Ophir Electricity later merged with four other New South Wales electricity companies to form Advance Energy, the business expanded to become one of Australia's leading electricity retailers with a customer base that included some of the largest C&I users of energy in the country.

In July 2001, Advance Energy merged with two other leading regional players in the energy market, Great Southern Energy and NorthPower, to become Country Energy. This merger provided the economies of scale for the business to compete effectively when the final segment, the residential market, opened to competition in January 2002. Country Energy, therefore, sought an advanced scalable CIS to support its merger expansion and ambitious growth plans. The company needed to consolidate more than 750,000 retail and regulated distribution customers spanning electricity, gas and other energy-related products on a single CIS platform.

Selecting the CIS

Country Energy's customer base is located in Queensland, Victoria, South Australia, and covers three-quarters of New South Wales, an area about the size of Texas. Therefore, one of the key requirements of the CIS was the need to be browser-based to connect more than 100 offices and service centers throughout Country Energy's expansive territory. This would enable all service units to share real-time information for improved operational and customer-service efficiencies.

To satisfy the demanding specifications, Country Energy evaluated many system options and competitive products, including the company's three legacy systems for which it had long-term track records of performance. In September 2001, Country Energy selected Peace Software's CIS suite, which could be implemented at a lower cost than the competition. This is also the CIS the former Ophir Electricity installed six years before in 1995.

Key Features of Peace

The CIS can be rapidly deployed because of its flexible thin-client browser-user interface (BUI) architecture, which is platform-independent and runs on any standard browser. Country Energy did not need to install software on individual workstations, so future CIS upgrades needed only to be applied to the central server. Therefore, Country Energy expects to realize significant cost savings as a result of supporting one server versus thousands of individual workstations over its wide-area network.

Peace's third-generation BUI also offers significant usability advantages in Country Energy's call center environment. The BUI mirrors the Internet design, speed and interactivity, and the simplified easy-to-read BUI screens consolidate and immediately present pertinent customer information with more detailed data just a click away. As the new BUI screens mark a significant improvement from the previous text-based screens, call center operatives have been quick to adapt to the new system, and can respond to customer inquiries and requests promptly with more intelligent real-time information.

The advanced Internet self-service option has proven to be quite popular with Country Energy's remote customers. They are able to access their account and energy consumption information, interact with their account manager, enter meter readings and pay their bills online, eliminating the need to visit a service center or post office. This self-serve feature also enables Country Energy to reduce customer interaction costs in its call centers and billing units.

The C&I customers have the added benefit of being able to view and download 3-D graphical-demand profiles of their half-hourly electricity consumption, thereby providing them the information to improve the management of energy usage and budgets. These customer-specific demand profiles can be rotated and viewed from any angle. Zoom facilities allow customers to access analysis over specific time periods.

Implementation of the CIS

Following selection of the CIS provider, Country Energy had a six-month deadline to merge its businesses and simultaneously implement a new technology platform in time for the opening of the residential market in January 2002. A joint Peace Software and IBM Global Services (formerly PwC Consulting) team immediately started to define the new business processes, installing the latest Peace version and developing the Extensible Mark-up Language (XML) market participant interfaces for customer enrollments, meter readings and charges.

Next, they carried out a three-phase implementation to convert Country Energy's entire customer base across to the upgraded Peace version, starting with Advance Energy's customers, followed by Great Southern then NorthPower customers. The phased rollouts were extremely smooth with an initial 99.96% conversion accuracy and no disruption to call center operations.

The comprehensive off-the-shelf functionality of the Peace CIS proved to be a key factor behind Country Energy's ability to successfully restructure its organization quickly and effectively to meet the complex business requirements. Furthermore, professional services provided by the contractor ensured the new system was in place within the tight time frame amidst unfolding organizational and market changes. Consequently, Country Energy was in a position to supply a customer quote on the first day of residential competition — the only market participant able to do so.

Return on Investment

Country Energy saved substantial implementation costs by choosing Peace Software. Country Energy spent a third of the cost of what its major competitors spent on equipping themselves for full retail competition and was commended accordingly by the state regulator.

Advantages and Benefits of the CIS

The Peace CIS system installed by Country Energy has generated several immediate advantages and has the potential to produce significant financial benefits and business opportunities in the long-term, as outlined below:

• Interval metering is extensively used in Australia, reflecting the maturity of the competitive Australian C&I customer market. At Country Energy, the highly scalable Peace system is processing 10-million interval meter reads each month for 10,000 large C&I customers on half-hourly metering contracts. The advanced C&I billing component automates the continuous aggregation of the interval demand data and then calculates these data according to more than 300 complex-pricing structures to generate individual bills.

  Country Energy realizes the value in targeting profitable C&I customers and improving margins, thus Peace's sophisticated interval metering and pricing programs are key to its C&I strategy. It enables the company to build complex, customized tariffs to attract and retain large customers and flexibly switch these customers between contract-pricing structures independently of the metering configuration.

• Country Energy operates the second-largest electricity network in the world, and the Peace platform is supporting the company's distribution operations and retail business.

• By selecting an upgradeable package easily configurable to ongoing business and market changes, Country Energy will continue to benefit for future cost savings.

Future Plans

The CIS system is working well, and Country Energy's customer-service focus has enabled the company to increase its market share steadily since January 2002, with a win-to-loss ratio of residential and small business customers of nearly four to one.

Future initiatives are also underway to introduce new product and pricing strategies to attract a greater market share, with particular focus on further streamlining acquisition costs to improve the bottom line.

For the future, to keep and nurture existing customers and attract new customers, the company plans to take advantage of regular version upgrades that address evolving market and business trends.

Patrick Cooper contributes diversity and experience to Country Energy's corporate team, having worked in several senior accounting, credit control, finance and IT roles. For the past five years Cooper, now Country Energy's general manager of information services, has played a crucial role in equipping Country Energy with information and communications technology required to compete and grow in the competitive Australian energy market. He also served as state chairman and national board member of the Institute of Chartered Accountants, Australia.
patrick.cooper@countryenergy.com.au