By George Huitema

Smart metering has been getting a lot of attention in the past few years, driven primarily by the focus on energy efficiency. But besides this important driver, the traditional role of metering, getting data for billing and settlement, should not be underestimated.

Smart meters will give us more information and more frequently. It will make it possible to use more elaborate billing and settlement schemes where time dependent tariffs will play an important role. But besides playing around with tariffs, billing will change more fundamentally according to the foreseen changes in the set up of traditional business relationships in the energy world.

Up to now, billing systems and processes have been set up in a hierarchical way by the dominant operator. The operator sends out the invoices and the customers have to pay. But in the future energy world business relationships will change and there will not only be fixed one-way relationships of suppliers towards consumers. Energy grids will transform from traditional, centralised networks to a hybrid of global networks mixed with local grids. ICT infrastructure, in particular the administrative billing processes, need to enable this business transformation of decentralisation. There will be also more dynamic relationships where for example, in the case of decentralised energy production, consumers can also be producers at the same time, thus forming local billing domains.

Another billing challenge is given by the future availability of new demand and response mechanisms for parties dealing with energy. These market mechanisms assume that all three main inputs to any billing process, i.e. price, metered data and customer data, will be supplied by energy meters and customer management systems in the network very frequently and moreover, in sync with the needs of the different parties in the market.

Another major impact will be found on the architecture of billing systems. The need for business agility supporting dynamic billing relationships demands a decoupling of the billing functions from the billing processes Through the concept of a service oriented billing solution it is possible to eliminate the situation where most current billing systems are based on tightly coupled functions and to use services from various different billing service providers.

Moreover, there should be an open standard for smart meter services, such as billing services, so that billing systems from different suppliers and vendors are interoperable and can work together easily. Such an open billing standard would also be necessary for helping customers to control their energy usage by letting them actively participate in local and global markets.

In summary, the impact of the introduction of smart metering on the billing world will be substantial.