Electronic Business Transaction (EBT) Hub Services and the Ontario Market
Market Overview
The Ontario electricity market has approximately 90 local distribution companies (LDCs) and 15 active retailers. The market rules support a bill-ready retailer billing model, in which the LDCs inform retailers of the amount of commodity consumed by each of their customers once per billing cycle, and the retailers inform the LDCs of the commodity charge to add to their customers’ bills. In a bill-ready market, the retailers are required to calculate the invoice charge based on the customer’s consumption. The Ontario market supports both distributor consolidated billing (DCB) and retailer consolidated billing (RCB), although in practice virtually all retailers use the DCB model. This is because retailers generally believe that the benefits of having the LDC print, mail and collect the bills outweigh the benefits of billing the customer directly themselves.
The business processes of retailers are outlined in the Ontario Energy Board’s (OEB) Retail Settlement Code (RSC) and the Electronic Business Transaction (EBT) standards (collectively known as the market rules). These standards define the processes for enroling, billing and dropping consumers, updating consumer information and settling between retailers and LDCs. They also define data representation and communication standards, through which the retailers and the LDCs exchange transactions (EBTs) to implement these business processes.
EBT Communication
The Ontario retail electricity market supports EBT exchange between LDCs and retailers through a hub market model. In this type of market architecture, each market participant communicates with its trading partners through an EBT hub service provider. The hub service provider is responsible for routing the transactions to the appropriate market participant, either directly or through the hub service provider of that market participant. The diagram below illustrates the concept:
The advantage of this market model is that each market participant need only integrate its back-office systems to a single point of contact – its hub service provider. In the alternative market architecture, a point-to-point market, each market participant must integrate its back-office systems to all other market participants. For a retailer in Ontario, this means integrating its back-office systems to 90 different LDCs, creating a more expensive and unmanageable integration problem.
The Value Proposition
In Ontario’s retail electricity market, SPi is the leading provider of EBT hub services, with over 85% market share by customer volume and 99.9% market share by retailer volume. Through its EBT Viewer application, the SPi EBT Hub provides its customers with the ability to audit transaction flows from end to end, which greatly improves their productivity. SPi’s system processes nearly 20 times the transaction volume of other hubs in Ontario, registering almost 40 million transactions per year. In addition, SPi’s systems are hosted in a state-of-the-art hosting facility, and provide unrivalled scalability and reliability, achieving over 99.9% availability since market opening in 2002. SPi also provides 7/24 customer support to over 70 market participants of greatly varying sizes through its client services and operations department. In addition to the above-mentioned benefits, it is important for potential customers to consider the following:
- The province’s Smart Metering Initiative (SMI) may result in a 1,000-fold increase in data volumes flowing through the retail electricity market. Currently, SPi’s competitors handle only about 5% of the transaction volumes that SPi processes. Further, SPi’s systems are fully tested to meet the demands of SMI.
- SPi’s all-Canadian ownership and operations ensure that its clients’ obligations under the Personal Information Protection and Electronic Documents Act (PIPEDA) are met. There are no aspects of SPi’s operations that are under US corporate control and therefore accessible by American law enforcement agencies under the USA PATRIOT Act.
- SPi embraces the concept of continuous improvement for all of its services and products. By comparison, its competitors appear to take the position of enhancing or modifying only by request or upon a sale.
- Service organizations have a responsibility under the Canadian Institute of Chartered Accountants’ Handbook Section 5970 to ensure that their services are high in quality and accuracy. SPi has confidence in its systems and controls as well as in its ability to handle the financial and resource implications of a typical audit.
- SPi provides all of its clients with access to its online EBT Viewer product. This web-based tool allows market participants to track their transactions from end to end through the EBT Hub which enables auditing of transaction flows. Existing clients find this to be a significant productivity tool for their staff when dealing with transaction processing exceptions.
- SPi securely maintains and archives a central repository of your EBT data, and makes all of your historical information available through its online EBT Viewer product.