Poor address data comes with a hefty price tag

Households and businesses spend around £55 billion on energy each year. With a typical utility having millions of customers and properties they supply gas and/or electricity to, the importance of using the most accurate address data should not be underestimated.

A utility company stores millions of addresses across multiple systems. In some systems they will be validated to conform to a specific standard, such as the Post Office Address File (PAF), but in others not, resulting in inconsistencies in both format and quality. Even a small percentage of poor addresses can cause hundreds of thousands of issues, resulting in incorrect billing and unpaid invoices.

In addition to revenue lost through incorrect billing, another significant casualty of poor address data can be when customers switch energy supplier. According to Ofgem, switching rates reached a high in 2018/19 with over 20 per cent of customers switching in April 2019. However, concerns remain over the reliability and speed of switching. With the dawn of next-working-day switching on the horizon, inaccurate address data is likely to have an even more substantial impact.

Between July 2018 and July 2019, around 130,000 customers were switched erroneously. According to Ofgem, the single largest contributor to these mistakes was inaccurate customer address data. As a result, Ofgem introduced an automatic compensation of £30 or more for such transfers, which it estimates will cost the industry around £73 million this year. The financial impact of this is likely to soar with the advent of next-working-day switching.

One of the ways the energy companies can prepare themselves for next-working-day switching is to ensure their address data is clean and up-to-date. As the Central Switching Service will be using the most accurate dataset available, AddressBase Premium, it makes good sense for the energy companies to mirror this by matching and cleansing their address data against AddressBase Premium. This dataset adheres to the British Standard BS7666 where every property has a Unique Property Reference Number (UPRN) and the full lifecycle of a property.

While AddressBase Premium is the ultimate address dataset to use, it is highly complex and therefore requires an advanced and functionally rich software solution that will seamlessly integrate with operational systems, enabling addresses to be managed, matched and shared consistently. Aligned Assets’ address management solution for utilities, is proven, powerful and easy to use, allowing users to store officially recognised British Standard BS7666 address data centrally, while being able to share across all departments within the utility – be it maintenance, supply, billing, etc.

Using the UPRN as the key identifier of an address is the best way of ensuring its accuracy. When next-working-day switching becomes a reality in 2021, using the UPRNs will provide the most accurate way of changing from one supplier to another. The Central Switching Service, where customers will register for next-working-day switching, is currently developing a registration system using the AddressBase Premium dataset.

It makes sense for the energy utilities to mirror this with their own use of AddressBase Premium. As the leading supplier of AddressBase Premium address management solutions for the emergency services, we are well placed to help utilities get their address data up to speed, helping them to eliminate address data errors, and the substantial financial losses that result from that.

To find out more or request a free demo call 01483 717950 or email: solutions@aligned-assets.co.uk