If increased automation drives efficiency, it stands to reason that manual processes create inefficiencies—and a big opportunity for improvement. In the utility space, the continued use of manual processes in the regulatory reporting process has served to create a gap that is just aching to be filled.
Recently, Utegration teamed with Informa Infrastructure Intelligence to complete a detailed and thorough survey of utility companies. The results confirmed a major pain point for the industry: the regulatory reporting process is manual, complicated, and in some cases, one of the most time-consuming activities that a utility can undertake in a given year.
Key Observations
Changing Winds: While nearly 80% of utilities surveyed state that they have a clear and well-defined regulatory strategy, half of those expressed a need to update that strategy due to constantly changing business and regulatory requirements. It’s no secret that the regulatory process is constantly in flux, with new and updated requirements, new forms, new processes, and administrative changes. Any manual processes that exist will constantly need to be updated, taking valuable time from key resources during potentially active times. The key is automation: the more processes utilities can automate through technology that also makes appropriate and timely changes in the processes without resource intervention, the better they’re prepared for future investments and opportunities.
Data is paramount, and visualization is the storyteller: Getting your data through an automated process is only the first step, and data is only as good as its intended use. Visualization of this data through KPIs, dashboards and tools is the logical conclusion to automated regulatory data gathering and processing. For a utility, knowing the current vs. allowed ROE in a particular jurisdiction can make the difference between operating effectively and being called in by regulators for a (possibly unwanted) rate case. While nearly 85% of utilities have some sort of visualization process, either through KPI or a dashboard view, these are dated and populated with manual intervention, therefore reducing the quality and usefulness of this data. Bringing to bear new technologies, new automation processes and advanced financial solutions are key to using this data to tell a clear story that is both timely and actionable.
The regulatory process isn’t going to stop: Nearly 63% of the respondents stated that their frequency of regulatory filings is increasing, along with the costs and resources (human capital) required to complete these filings. With nearly 70% of utilities claiming that their process for filing is at least somewhat inefficient, we can see how these costs will only rise in the future, exacerbating a problem that should be solved now, rather than in five or ten years, when costs could be out of control.
The integrated and automated tools will be the prime movers to efficiency: With nearly 40% of utilities claiming that their Enterprise Resource Planning (ERP) solution does NOT integrate directly with their regulatory solution interface, the gap for properly integrated and timely tools has never been bigger. With complex cross-functional teams, it’s more important than ever to produce timely, accurate, and clear regulatory data to maximize the return on capital and equity to your utility and ensure the ratepayers, regulators, shareholders understand your vision, strategy, and financial goals.
To download the survey, click here.
You can also view all our resources on regulatory reporting here.