Non-utility customer information—What’s the value?
Dean A. Zastava
UGC Consulting 6200 S. Syracuse Way, Suite 222 Englewood, Colo. 80111
(303) 773-6166, (303) 773-6618 (fax)
Abstract
Business Geographies applications, data providers, and consultants have created a high level of interest in non-utility
customer information due to the increasingly competitive utility marketplace. A utility company today can purchase
literally gigabytes of information about non-customers. These data range from digital images that show the location
of all buildings to economic, cultural, and education profiles of residents within individual buildings. These data are
certainly interesting; however, they are not available without cost, and they may not bring added value to the utility if
the data are not analyzed properly, or if the data are purchased for an area that does not need to be analyzed.
Frequently-asked questions address the potential value of non-customer information to a utility company, and what
requirements need to be considered before loading this data into an AM/FM/GIS.
Key factors inresolving theseissues willinclude thefollowing:
- Definingthe need
- Resolving the address matching problem
- Determining a relatively low-cost approach
- Looking into the crystal ball to see what we can expect in the near future
Defining the Need
Several AM/FM/GIS application opportunities exist to further a utility’s goals of adopting a proactive approach to
compiling and using non-customer information:
- Target Marketing - Use non-customer characteristics, estimated new load (inferred age of desired load appliances
such as furnaces and water heaters), proximity to existing facilities, and estimated cost to provide service to
determine the best geographic areas and potential new customer sites to target for new service. Use targeted
analysis results for target marketing promotional campaigns and sales prospect lists.
- Sales Forecasting - Use new customer growth location areas and non-customer locations and actual or estimated
usage patterns (lifestyle profile, age, family makeup) to determine geographic market penetration, forecast
geographic market sales and estimate projected new market share.
- Sales Tool - Predesign distribution for subdivisions to allow “what-if’ costing during, for example, homeowner
association meetings. Confirm new applications and contracts while non-customer interest is at its highest point.
Reduce follow -up time and avoid missed opportunities due to customers losing interest due to passage of time.
- Sales Resource Management - Use forecasted sales by geographic market area to determine appropriate sales
staffing for each area. Track forecasted-to-actual sales by geographic market area to determine where sales goals
are being met and where problem areas exist. Focus sales efforts on areas that are strategic and avoid areas where
system is weak.
- Facilities Expansion Planning - Use forecasted sales revenues and margins by geographic market area to determine
the financial payback associated with facilities expansion in each area.
- Support for Other Utility Opportunities - Gas utility companies are already providing services to municipal water
utilities, and all utility companies are looking at meter reading and deciding whether to expand meter reading
services to include other utilities in common service areas. Addresses for all buildings (customers of all utilities)
are required to meet these new service offerings.
- Emergency Response - Provide location and other relevant information (e.g., phone number) of non-customers as
well as customers for use in emergency response situations.
Many of the applications listed above are strategic and deal with benefits that are softer and more difficult to
measure than enhanced labor productivity; therefore, executive support may be imperative to move forward. Be
prepared to spend some time educating your executives as to the value of non-customer addresses and information.
Resolving The Address Matching Problem
A top priority for virtually any competitive-minded utility today is to know the location of its customers and potential
customers in relation to the location of its facilities. This is not a trivial issue. Utility companies’ customer
information systems have historically focused on getting bills delivered and knowing meter locations, and have not
been concerned with addresses that were not part of a billing or a service location. Decades of doing business using
paper-based maps and records, and relying on cost-plus rate making rather than market forces have left many utilities
with a deficient understanding of their market areas and their customers.
To utilize a customer’s or non customer’s location in an AM/FM/GIS, geographic coordinates need to be assigned to
each customer and non-customer address. This is accomplished using “geocoding”, the process of matching a data
file of address information against a geographically located dataset such as street centerlines (recommended
minimum) or Zip+4 centroids (50,000-foot level) sothata latitudellonghude orothercoordinate valuemay be
assigned toeachrecord.Thisthenallowstheaddressinformation tobegraphically displayed withinthe
AM/FM/GIS.
A recent pilot project for a gas utility client demonstrated that commercially available geocoded addresses from two
different vendors was nearly as good as addresses that were digitized by a data conversion contractor from digital
aerial photos. The commercial data was deemed adequate from an accuracy perspective, and the cost of all
addresses from the commercial data vendor was less than having the data conversion contractor digitize the services.
There is also a related problem in obtaining addresses from certain municipalities in the service area without
performing a field survey. Progressive data conversion contractors are evaluating commercially available geocoded
addresses as a more efficient and lower cost way of providing their clients with address information.
A number of components are required to evaluate the usefulness of such a geocoding strategy. These include a data
file of existing utility customer addresses, street address file linked to streets centerlines or Zip+4 centroids, a
geographic layer showing utility infrastructure and an address matching and geocoding software program.
Customer Address File
The first piece needed in conducting a geocoding evaluation is a data file with current utility customer address
information. These data are acquired by performing an extract of the customer information system to create an
ASCII text file containing a number of fields, including:
