The utility billing system is preventing rate and program innovation

Utilities are rolling out more complex electricity pricing than ever, including time-of-use rates that charge different prices depending on the hour, EV-specific rates, and payments for solar sent back to the grid. According to a new opinion piece, the number of approved electricity rates nationwide has grown roughly tenfold over the past five years, to more than 50,000. The problem is that the billing software many utilities use is old, built for a time when a bill was just one price times one usage number. Adding a new rate often means programming it twice, in two different systems, and testing takes so long that some new rate plans take 18 to 36 months to reach customer bills.

For homeowners, this matters because it slows down programs meant to save you money. Rates that reward you for shifting laundry or EV charging to off-peak hours, community solar programs, and managed-charging discounts for electric vehicles all depend on the billing system being able to calculate and clearly show what you'd save. When that system can't keep up, these programs move slowly or stay limited to a small pilot group instead of expanding to more households.

The piece argues utilities shouldn't necessarily spend hundreds of millions replacing their whole billing system, since that money often shows up on your bill anyway. Instead, it calls for separating rate calculations from the core billing system so new pricing plans can launch faster and cheaper. It also notes regulators in at least 13 states are starting to tie utility profits to how quickly and clearly they handle billing.