At BGE, billing enters the 1990s No more typed notes for biggest customers

September 18, 1995|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

It sounds more like the 1930s than the 1990s: A major company, Baltimore Gas and Electric Co., typing bills for its biggest, most sophisticated customers on a typewriter and posting payments by hand in a ledger.

Believe it or not, that was true until last month, when BGE put the finishing touches on a two-year effort to automate the billing of its 1,000 or so largest commercial customers.

Those customers represent 25 percent of BGE's annual revenue from energy sales, or about $600 million last year.

In place of the hand-typed bills and hand-written accounts ledgers that had lasted improbably long into the information age, there is a new system that the company says will let sales representatives tell big customers how they are using power, how they can scrimp on it and how BGE can sell them other products and services to manage this cost center.

Bob Cratchit doesn't work here any more.

At bottom, BGE's switch is a tale of the changing conception of what makes up good service. In the old days, good service meant personal service, and hand-calculated bills were the most individualized service of all. Now, good service means getting information in real time.

But the change is related to another trend that, for the utility business, could be as profound as the information revolution: deregulation.

At some point, it's likely that BGE will not have a monopoly on the 1.1 million Maryland customers to whom it sells electricity or its 530,000 gas service accounts. So the time for BGE to boost service to the big accounts that have a disproportionate impact on a competitive future is now, before deregulation.

"What BGE is trying to do is better serve its main accounts," said Jack Mann, a partner at Andersen Consulting LLP in Washington who helped BGE design the new system. "These are the accounts that could be at risk."

That risk, though, isn't yet at hand. Last month, Maryland's Public Service Commission set new guidelines which encouraged competition in the wholesale sale of power -- that is, the power that utilities sell each other -- but continued to rule out broad competition at the retail level, even for big commercial and industrial customers, said BGE spokesman Arthur J. Slusark.

"Essentially, what the commission said was that the electric utility industry in Maryland doesn't require dramatic fixing," PSC spokesman Frank B. Fulton Jr. said when the guidelines came out. By the time the commission acted, however, BGE's two-year campaign to reform commercial billing was in place. The first new bills went out in August.

The process of researching the changes and putting them in place cost BGE more than $5 million, Mr. Slusark said.

Customers should not notice big changes initially, he said. The big changes will come only after BGE account representatives explain to big customers how their billing can now be customized to their specific needs.

The changes have set off no ripples at all for the Rouse Co. of Columbia, one of BGE's five biggest customers. "We have not yet been informed about it," Rouse spokeswoman Cathy Lickteig said.

The utility's other biggest customers are Bethlehem Steel Corp.'s Sparrows Point mill, the U.S. Army's Fort Meade military reservation, Baltimore City schools and Giant Food Inc., Mr. Slusark said.

Each of the utility's top 10 customers spent at least $500,000 in August for utilities, with a top of $1.2 million for the month. Beth Steel is not affected by the billing changes because it has a separate deal with the utility, Mr. Slusark said.

The utility counts on three different ways for the new system to pay off even if deregulation does not arrive quickly, said Greg Martin, manager of BGE's customer service operations.

First, the system saves labor costs now. Second, BGE gets royalties from more than 30 other utilities that have based their residential-customer billing system on the one BGE introduced in 1990, and hopes to duplicate that with the commercial system.

Mr. Martin said the consumer billing system is similar to the new commercial system, but is designed to serve large numbers of customers with similar needs.

Third, while deregulation on its home turf is not in the immediate future, BGE knows the issue hasn't gone away. "We recognize that the environment and the whole kind of billing situation and competitive situation are going to change dramatically," Mr. Martin said. "We needed a system by which we could deal with that kind of flexible arrangement."

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