IoT and Behavioral Billing to Optimize Use of Energy

With energy producers, distributers and consumers focused on optimizing the use of energy whether it be electric, oil or gas, technology can make a difference through the use of behavioral billing. Behavioral billing uses methods of billing that can alter the behavior of end consumers to optimize their use of energy to reduce their cost. When you throw into the mix the use of Internet of Things (IoT), real time behavioral monitoring plays a role in optimizing energy usage.

The benefits of behavioral billing utilizing IoT technology are highlighted in the following hypothetical use case. Several energy producing companies have a coalition that provides electric power distribution to a wide area of a state that includes cities of significant size as well as rural population. The power generation comes from several sources that are best optimized by having a steady consumption of electricity. The coalition utilizes smart meters that allows real time access to energy consumption and is set up with a robust billing system to monitor electrical usage on a near real time basis. Several cities in the service area have negotiated consolidated rates for the residences and businesses within their city. They use the same intelligent utility billing system as the power coalition such that it is an integrated billing system. In addition to electrical power, these cities consolidate the gas, water and waste treatment usage into one bill for their constituents where the constituent can elect to have a flat rate monthly payment that is trued up and reset each year for estimated usage. These cities also have a progressive energy conservation program where the use of Internet of Things is prevalent to make the communities be smart cities. Not only are smart sensors being used to detect power usage, but they also have smart Internet controlled system allowing the systems to be turned on and off through the Internet. High power usage industrial complexes have implemented such controls. As part of the power optimization program, the power coalition can turn non-critical system on and off during peak usage times to best balance and maintain energy production optimizing their power production resources. The cost savings for the optimization of energy production is passed on to the end users through the use of real time intelligent billing provided by the technology. Those consumers that participate in the energy optimization program gain the benefits of the cost savings.

Even though this is hypothetical case study, the technology exists today to implement such a system. The intelligent billing system is here and now while the IoT is still evolving but not far away. In different parts of the world, communities are striving toward a zero foot print for energy consumption. These smart communities are taking advantage of IoT and cost reduction incentives using behavioral billing systems to encourage their constituents to use energy wisely.

Behavioral billing can be utilized by energy producer by allowing variable billing rates based on time, bundled packages, group rates, changes in consumption and other behavioral factors. In conjunction with smart wireless meter readers as IoT, the energy distributer can use behavioral billing by tracking the end consumer usage on a real time basis allowing billing to be performed with different rates depending on the time being consumed. The end consumer is the ultimate party whose behavior is influenced by the smart billing systems as well as the one who benefits from the cost savings from optimal energy consumption. With the advancement of IoT system controls, the consumer can program their energy consumptions to perform high energy consumption tasks during reduced rate periods of time. Energy consumption systems can also be programmed to monitor their energy consumption and send alerts when abnormal energy consumption is taking place.

In order to have behavioral billing to be effective the technology needs to present the energy consumption information in a way that can influence the end user to optimize their energy use. This is accomplished with the use of dashboards and analytics. When you combine behavioral billing with IoT technology the dashboards and analytics can benefit all three aspects of energy consumption: producers, distributers and consumers.

For the producer and distributer, the dashboards provide visual representation of business critical Key Performance Indicators (KPIs) and metrics with easy to read graphic pie charts or bar graphs. Color coding allows quick insight into those critical areas requiring attention.
The dashboards also provide the ability to drill down, analyze and act upon the details of energy consumption information in a timely manner allowing more effective management of production and distribution.
Analytics enable forecasting, trend recognition and predictive planning to take place on a regular basis without having to run complex reports.
Allowing the end user to have personalized dashboards when reviewing their accounts is where the real behavior changes can come about. Such dashboards allow the end user to compare their energy usage from various angles such as previous year comparison, trends in usage, and comparison to industry or neighborhood standards. The dashboard can also provide recommended changes in energy consumption that might help them optimize their energy consumption.
As more use of IoT smart sensors come into play, the intelligent billing system that is monitoring energy consumption on a near real time basis can also employ anomaly detection engines that look for abnormal use of energy and can either initiate corrective action itself and/or issue alerts to concerned parties so that they can take corrective action. These anomaly detection engines can also take in diverse Internet information such as weather forecasts to integrate with the energy consumption to enhance their ability to detect anomalies.

In conclusion, the combination of Internet of Things technology along with intelligent behavioral billing systems can help energy producers, distributors and consumers to be smarter in the use of our energy saving costs while conserving vital energy resources.


This article was published in CIO Review and MetraTech.

Allen Pomerantz

As the General Manager and principal of Sofbang, Al Pomerantz is a hands on manager that rolls up his sleeves and dives in wherever he can help the customers, employees and company in general. He has a diverse background in various technology areas from automotive systems, semiconductor design, business continuity/disaster recovery, and information technology management. He is a systemic thinker who sees the big picture and quickly creates a technology road map to reach business goals. Al has his B.S. Degree in mechanical/Electrical engineering from General Motors Institute which is now known as Kettering University. He has held senior level management positions with a variety of businesses, from small, startup businesses to large, established organizations, including General Motors Corporation and Toshiba Corporation. When Al is not conducting Sofbang business, he enjoys watching movies, doing volunteer work and teaching people how to meditate.

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