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City of Seattle
Ed Murray, Mayor
NEWS ADVISORY

SUBJECT: New utility billing system delayed for extensive testing

FOR IMMEDIATE RELEASE:
4/1/2016  10:47:00 AM
FOR MORE INFORMATION CONTACT:
SPU Customer Service  (206) 684-3000


New utility billing system delayed for extensive testing
City Light and Public Utilities aim to avoid problems other cities have faced

SEATTLE — Seattle’s new utility customer information and billing system, under development since 2012 and scheduled to launch in April, will be delayed while an exhaustive final check is conducted to make sure the complex new system functions properly.

The additional system testing will have no impact on currently adopted utility rates charged to City Light and SPU customers.

A new launch date for the project is now set for this fall, at a cost of more than $100 million. The additional system testing will have no impact on currently adopted utility rates charged to City Light and SPU customers.

The Seattle City Light and Seattle Public Utilities (SPU) new customer information system (NCIS) will replace a 15-year-old suite of database management software, which has lasted five years beyond its expected life and is no longer supported by its vendor.

Every year, the new system will process 5.5 million City Light and SPU bills and collect about $1.8 billion in revenue. Over its projected lifetime, NCIS will handle some $21 billion in customer bills and payments, while serving more than 400,000 commercial, residential and industrial customers.

“Replacing the outdated existing system is critical to the utilities' continued operations,” said SPU Director Ray Hoffman. SPU is co-managing the project with City Light.

“If the old, unsupported billing system were to crash, the resulting loss in revenues — potentially $5 million a day — could jeopardize the utilities’ ability to deliver critical services,” Hoffman said.

Those services include electric power, street lighting, drinking water, garbage and recycling collection, stormwater drainage, and operation of the city’s sewer network.

Hoffman said the new 21st Century technology will give the utilities the ability to add a number of customer-friendly features, including enhanced security.

“ We’ve seen what has happened elsewhere when a billing system is rushed into use. We cannot afford to make that mistake. We’re going to take the time that’s necessary to do this right.”

By modernizing existing billing and customer information applications, the new state-of-the-art system will: improve operational efficiency; provide better communication channels to customers; provide greater financial control and auditing; improve privacy controls and security for customer data; and enhance identity theft prevention measures.

The NCIS project was approved by then-Mayor Mike McGinn and the Seattle City Council in 2012. At the project’s initiation the budget was $66 million. After changes in scope, the project’s current budget of $85 million was adopted by the Council in November 2015. Since then valuable work additions have been made to the project, notably more pre-launch testing to ensure timely and accurate billing. The utilities’ steadfast commitment to quality has increased estimated project costs and extended its delivery date.

Utility computer billing systems have a reputation for being complicated and difficult to develop; and, with a limited number of vendors, they’re always expensive. For example, the Los Angeles Department of Water and Power’s billing and information system, which went live in September 2013, has reportedly cost $181 million to date, and may go as high as $200 million by the time the dust settles. According to a state of California audit, billing system errors due to a rushed implementation of the LADWP system resulted in $245 million in uncollected revenue.

City Light’s new General Manager and CEO Larry Weis said the biggest lesson of other recent utility computer system replacements around the country — successful and unsuccessful — is to go live with the project when every aspect of a new system has been thoroughly tested.

“We’ve seen what has happened elsewhere when a billing system is rushed into use,” Weis said. “We cannot afford to make that mistake. We’re going to take the time that’s necessary to do this right.”

When the new system is launched later this year, it will be seamless. Seattle City Light and Seattle Public Utilities customers — the people most directly touched by the new system — are not expected to be inconvenienced by the delayed launch. The most visible difference customers will notice is their account numbers will change. Those new account numbers won’t be available until the new system is up and running.

In May 2015 Mayor Ed Murray recognized the need to more consistently manage IT project and service delivery, and announced the consolidation of more than 650 IT staff into the new Seattle Information Technology Department, effective April 6, 2016.

“Seattle is a hub for technology innovation and our public expects their government to use modern tools to efficiently deliver services,” said Michael Mattmiller, the City's Chief Technology Officer.

“Projects like NCIS will provide rate payers with access to data to understand their energy and resource consumption, and City departments with tools to more efficiently manage their operations. As we stand up the new Seattle IT Department, we will develop consistent practices for managing IT project and service delivery,” Mattmiller said.

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