There are plenty of examples illustrating that the way we’ve always done things isn’t necessarily the best way. After all, necessity is the mother of invention. Are you reading this on a mobile device? If you are, it’s a feat that would have seemed impossible two decades ago.

Electric utilities have only seen progress when they accept change and invest in improvements. Over the years, there have been huge changes in how they produce, deliver, and communicate about power. The next big change could center around billing and how they charge customers to use that power. Read on as we explore a few reasons why some U.S. electric utilities are experimenting with flat-rate billing.

Utilities can better predict revenue with set billing

Before we get too far into this, we should mention that flat-rate billing is still very limited. As Quartz detailed in a recent piece on the topic, three utilities have rolled out flat-rate pricing as part of a test with a select number of customers. However, with benefits like predictable revenue, we wouldn’t be surprised to see that number grow soon.

There are numerous advantages to a utility having better insight into incoming revenue. For one, there are no seasonal dip times where the weather warrants neither the use of heat nor air conditioning. Homeowners may opt to open windows instead. With this consistency, utilities can plan ahead better. They can ensure that money is always in the budget for necessary fixes, improvements, or even new additions.

Related: Four Reasons Your Utility Should Move to Software

Utilities further reduce their emissions

You likely won’t find a higher priority across the board with utilities than becoming more environmentally friendly through reduced emissions. According to one industry group, a model that includes flat-rate billing could go a long way toward making that happen.

According to a research paper penned by economists and a utility-backed investment firm, a utility with a grid powered by natural gas and 100,000 participants in a flat-rate billing plan would be the environmental equivalent of more than 100,000 cars being taken off the road for a year. In this model, the consumer allows the utility to have “limited control of a set of agreed-upon energy-related functions” in exchange for preset pricing at a reasonable cost. By allowing the utility these insignificant privileges, utilities can better time the power usage for the sake of efficiency and reduced emissions.

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Utilities can use it as an incentive

Another way utilities have been making strides toward more environmentally friendly practices is through the use of smart technology. Things like thermostats and smart meters, for example. However, an assortment of barriers has made adoption a problem in some areas.

Utilities could use the idea of a flat-rate billing model as a bargaining chip for customers who prefer the peace of mind and predictable pricing. Even though they were not willing to embrace smart technology. For example, the utility could offer a smart thermostat at no additional cost for any customer who uses flat-rate billing. That would give the utility insight into energy usage used to inform future business decisions.

Related: Utilities Space: Build a Flexible Business Model that Supports

Customers appreciate straightforward billing

There’s something to be said for customer satisfaction. Customers on a fixed budget will appreciate the safety and transparency of a flat-rate billing model. The fear of receiving a surprise bill or worrying about turning the heat on when it’s cold because of what it might cost becomes eliminated. Even those who aren’t on a fixed budget may worry about the cost of electricity rising. A flat-rate billing model mitigates that anxiety for the length of the customer’s contract.

Related: Treating Customers Like Assets: Three Steps

EnSight+ helps utilities operate more efficiently

While we can’t help you make the switch to flat-rate pricing, EnSight+ can help your utility be more effective and efficient with the use of our customizable field service software. Our robust, cloud-based solution provides the visibility, access, and functionality your team needs for work order management, scheduling, routing and dispatch, and so much more. Book your demo today to see what we can do for you.


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