Lights out for virtual utility as banks pull plug on Independent Energy

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Lights out for virtual utility as banks pull plug on Independent Energy

Mike Simons
Banks pull plug on Independent Energy's £119m billing backlog

Mike Simons

One of the UK's most aggressive virtual utilities has gone out of business because of disastrous problems with its billing IT system.

Banks turned off the lights at Independent Energy after giving up hope of recouping a £119m billing backlog at the company.

The utility's business model was based on the efficient trading of energy supplies and slick billing was essential to its success. Independent Energy outsourced its consumer and small business billing, payments and customer contact systems to Vertex, the IT services arm of United Utilities.

In February, Independent admitted that it had billed customers for only £35m of the £130m worth of electricity it sold in the second half of 1999 (Computer Weekly, 24 February).

Vertex provided extra resources to tackle the back-log while Independent chief executive John Sulley brought in X-Team, a division of Compaq, to build a bespoke system to allow it to send out interim bills.

At the time, the company said this action would clear the backlog by the end of April. However, Computer Weekly understands that X-Team was only contracted to build a rudimentary, PC-based system, which did not stem Independent's problems.

In May, Sulley said, "We anticipate substantially completing the backlog by the end of June."

In June Independent admitted the backlog had risen to £119m and put itself up for sale.

The utility attributed many of its problems to the poor quality of customer data, supplied by the regional utility companies whose customers it poached. The complaint was repeated by Vertex, but industry regulator Ofgem said this was not the case.

As Independent Energy called in the receiver, Vertex said it was billing correctly for 91.7% of customers and that it was responsible for just £10m of the backlog.

Insiders said Independent had also suffered from major problems with its in-house systems for billing and cash collection from large businesses.


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