Peace Software is to host billing services for energy utilities using an application service provider (ASP) model, with an undisclosed site already in trial.
Peace head Brian Peace says the move - which he is dubbing a vertical service provider that will focus solely on billing and not on other business operations - will see utility sites from further abroad, such as those in the UK, hosted from Peace’s US office.
Peace says as the world utility markets deregulate, winning energy retailers will have multiple sites in multiple markets, often in different countries.
This “distributed system” will give way to a trend bringing all billing sites into a central hub, using virtual private networks and the internet at high speeds, Peace says.
Last week Peace announced it had won a contract with the US’s second-largest wholesale energy trader, American Electric Power, for one million customers in the Texas state.
The contract also includes customers in Ohio, and if these two rollouts are successful, Peace will be contracted to provide billing services for two UK sites with between them 4.5 million customers, Brian Peace says.
Peace currently has around 10 sites on the Eastern sea border of North America, the area in which most deregulation in the electricity market is occuring, with another in Australia for Advance Energy and one for a water supply company in Palmerston North.
Peace runs 24-hour help desks for its utilities staff, most of which are channelled to operations in Auckland. But Brian Peace does not rule out providing call centres for the utilities' own customers one day.
Adding value for utilities will be the most important strategy as competition heightens, Peace says, part of the reason behind moves to bundle in services such as tax software with its browser-based Energy suite.
By 2002, Peace expects to have built the first of a line of portals which will take a utility’s trusted brand and offer its customers travel, banking, home security, cable and insurance along with payment services for gas, water, electricity and telecommunications. The utility earns a slice of transactions by “clipping the ticket”, Brian Peace says.
Peace would also take a share on a transaction basis. Peace’s developers would not build the varied services from scratch, but link to other sites.
The AEP deal was announced with a deal with MidAmerican, which wants to bill both electricity and gas on one statement, and only days after the start of phase two in a roll out for Canadian BC Gas.
AEP is one of the world’s largest energy providers, generating more power than New Zealand’s total generation capacity. The deal’s value was undisclosed but Brian Peace says it will account for a bulk of Peace's projected $US27 million in revenues next year. This year Peace’s revenue is expected to top $US15 million, after last year reaching $US9 million.
Brian Peace still plans to list his company on the Nasdaq in 2001.
“We are profitable and that’s unusual in the US.”