One of Canada’s largest utility companies plans to push its customers to view and pay their energy bills online, a move it believes may usher in the demise of paper-based billing.

Toronto Hydro Wednesday said it was working with E-route‘s Webdox service on an electronic bill presentment and payment (EBPP) solution that will also allow customers to track their energy consumption and challenge meter readings. At press time more than 50 people had signed up for the service.

Toronto Hydro wants to get at least three per cent–20.000 people–of its customer base paying online this year. While it may offer more convenience to some users, it also stands to significantly reduce costs for the energy provider. To produce each paper-based bill, for example, costs Toronto Hydro 80 cents. An online bill costs only 38 cents, which includes costs towards hosting, tracking and 15 cents to provide meter readings.

Blair Peberdy, Toronto Hydro’s vice-president of communications and corporate planning, said the company has been trying to encourage customer interaction through its site for the last year-and-a-half, but with increased development in the last six months. Customers were recently able to open and close accounts online, for example, or submit meter readings. Since then, the utility’s call centre has been fielding weekly requests for e-billing services.

“We’re going to push it. We do see it as a cost saving and a customer convenience,” he said. “Even if they move around (between online and offline channels), it’s the responsibility of the local utility that all of those customer transactions are as convenient as possible.”

All payments will be conducted through the customer’s financial institution. “We’re not set up to handle the financial transactions,” he said. “It doesn’t make sense for us to do it because they already have the Internet account with their banks, and the banks have the security in place.”

Webdox was formed as a joint venture with E-route and seven major banking institutions. The one holdout is the Bank of Montreal, which has sided with the other major EBPP provider, Canada Post’s Epost division.

David Koa, Webox’s vice-president of sales and marketing, said Toronto Hydro’s efforts represent a huge boost to the EBPP market, where the adoption rates have been challenged by the number of people who use the services.

“To have the largest city in Canada and I think the second-largest utility company in North America adds tremendous credibility,” he said. “It’s a strong stamp of approval.”

Koa said the deregulation of utilities in Ontario will force firms that have relied on their monopoly position to look for attractive ways to retain customers. “Given that the monthly invoice is the most frequent touchpoint that any business has, it’s a great way for any utility to start that process,” he said. “Why wait until open market? Why not build those strong relationship now so that you don’t lose a lot of customers.”

Matt Olesen, an analyst with Killen Associates in Palo Alto, Calif., said Toronto Hydro is the latest example of a larger trend in the EBPP space.

“Utilities have strongly embraced e-billing across North America,” he said. “I believe there is a movement in Canada — maybe there’s been some starts and some stops — but I would expect that most of the major utilities at this stage have e-billing either in place or are in the process of putting it in place.”

Koa said Webdox also works with Enersource (which provides hydro for Mississauga), Maritime Electric, Welland Hydro Electric, Saint John Energy, Cambridge Hydro and has several others in pilot mode. He added that there are at least four other Ontario utilities in the pipeline.

Peberdy said the utility market has reached a point where customers expect electronic options along with traditional means of dealing with the company.

“We could phase out paper billing,” he said. “That’s assuming that somewhere down the road every person is online and capable. I would think that it’s probably a generation away.”

However Olesen said sometimes EBPP projects don’t always meet the biller’s expectations.

“That is the customer value proposition, that they want it there for convenience,” he said. “But we haven’t necessarily seen that type of demand.”

Peberdy said Toronto Hydro will include an insert promoting e-billing with its paper bills that will go to 650,000 customers this week and offer online promotions on its site and with other portals. The utility will assess the campaign in December to see if more advertising is necessary, he said.

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