Payment ChannelsA Case Study of Payment Practices

Julie Compton Pellizzi

Project Leader

Customer Solutions Technology

About AGL Resources

• Headquartered in Atlanta, Georgia• Approximately 2,400 employees• Serves more than 2.2 million average customers through

natural gas utilities in six states • Largest marketer in Georgia under the Georgia Natural Gas

brand through majority ownership of SouthStar• Diversified operations include asset management with

Sequent Energy Management and gas storage projects in Louisiana and Texas.

About AGL Resources

• Atlanta Gas Light• Chattanooga Gas• Elizabethtown Gas• Elkton Gas• Florida City Gas• Virginia Natural Gas

FCG

VNG

AGL

ETG

CGC

Elkton

Distribution Operations

Atlanta Gas Light• More than 1.5 million average customers as of June 30,2007

• Function to sell retail natural gas deregulated since 1997

• Currently 12 marketers

Chattanooga Gas• 62,000 average customers as of June 30, 2007

• Serves Hamilton and Bradley counties in southeast TN

• 272,000 average customers as of June 30, 2007

• Serves Union, Middlesex, Sussex, Warren, Hunterdon, Morris and Mercer counties

Elizabethtown Gas

Elkton Gas

• 6,000 average customers as of June 30, 2007

• Serves Greater Elkton on Maryland’s Eastern shore

Florida City Gas

• 104,000 average customers as of June 30, 2007

• Serves Miami-Dade and Brevard counties

Virginia Natural Gas

• 271,000 customers as of June 30, 2007

• Serves Southeastern VA

Electronic Commerce• 7,806,447 = EDI transactions for 2006• Supply Chain

– Purchase Orders– Invoices– Vendor Payments

Electronic Commerce – Part Two• North American Energy Standards Board (NAESB)

Transactions– Available No-Notice Withdrawal for Operator – G873ANNW & G873ANNI

– Pre-Determined Allocation – G873PDAL

– Request for Confirmation – G873RQCF

– Confirmation Response – G873RRFC

– Scheduling – G873SQOP

– Enrollments / Response – Original, Changes and Drops

– Historical and Monthly Meter Usage - 867

– Energy Service Provider Invoicing & Application Advice – 810 & 824

Electronic Commerce – Part Three• How do we handle customers’ gas payments?• How do we incorporate six utilities’ regulatory

requirements?– Multiple Channels

• Lockbox • Electronic• Walk-in• Collection Agencies

Natural Gas Payments• Payment Methods

– ACH/CTX/CIE – various online banking tools or corporate functions

– IVR - Speedpay– Web - Speedpay– Recurring – authorized monthly withdrawals

• Payment Types– ACH (checking, savings, money market)– Credit Cards, ATM Cards, Pin-less Debit Cards

Payment PartnersOver 180,000 transactions/month:

Certegy (Fidelity BillPay®) CheckFree CheckFreePay Global Express MasterCard RPPS® Metavante Online Resources WesternUnion® Speedpay®

Western Union Speedpay is a registered service mark

of E Commerce Group Products, Inc.

AGL Resources Case Study Payment practices using Western Union Speedpay

• Ten + years ago – “check by phone” concept patented• Check writing software installed – DOS based• Physically printed checks and mailed to lockbox• Upgraded to Windows version• Migration to the Speedpay ASP extranet application

Service OverviewMany channels maximize payment acceptance capabilities

Walk In

IVR

Internet

Desktop

WU Call Center eBill/ Payments

Outbound Msg

WU Payment Channel / Type Currently Utilized

AGL

Resources

Cash

ACH

Credit Card

Debit Card

ATM

ACH

Credit Card

Debit Card

ATM

Service Overview05/03: Chattanooga Gas (CGC) & Virginia Natural Gas (VNG)

• Go Live on Extranet

01/05: VNG adds IVR & Internet Channels

03/05: CGC adds IVR & Internet Channels

06/05: Elkton Gas, Elizabethtown Gas & Florida City Gas • Go Live on Extranet, IVR & Internet

09/06: Rollout of payments accepted via API

Electronic Payment VolumeMay 2003 – May 2007

YEAR 1

YEAR 2

YEAR 3

YEAR 4YEAR VOLUME

2003 - 2004 61,538

2004 - 2005 113,236

2005 - 2006 319,793

2006 - 2007 387,903

Payment TrendsDistribution of electronic payments by type

2003 - 2004 2004 - 2005 2005 - 2006 2006 - 2007

CSR ASSISTED

100% 85% 39% 31%

SELF SERVE 0% 15% 61% 69%

Payment TrendsDistribution of electronic payments by interface

2003 - 2004 2004 - 2005 2005 - 2006 2006 - 2007

Channel %

CSR 100

IVR 0

WEB 0

API 0

Channel %

CSR 85

IVR 7

WEB 8

API 0

Channel %

CSR 39

IVR 25

WEB 36

API 0

Channel %

CSR 17

IVR 21

WEB 48

API 14

Payment TrendsDistribution by payment type

2003 - 2004 2004 - 2005 2005 - 2006 2006 - 2007

PMT %

ACH 100

ATM 0

CARD 0

PMT %

ACH 68

ATM 2

CARD 30

PMT %

ACH 58

ATM 6

CARD 36

PMT %

ACH 60

ATM 6

CARD 34

Electronic VolumesBefore & after fee addition

'03-'04

'04-'05

'05-'06

'06-'07

YEAR 2003 - 2004 2004 - 2005 2005 - 2006 2006 - 2007

VOLUME 61,538 113,236 319,793 387,903

03/05: Same Fee Across all Channels*

* With the NUI acquisition, some payments were coming in through another vendor, but were migrated to Speedpay

Current & Future InitiativesWeb Services

Real-time integration via Web services • Current Initiatives

– Performs Web service call to execute a payment transaction

• Future Initiatives– Account validation lookup using a Web service call

Current & Future InitiativesFlexible Pricing Models

• Continue to refine payment options• Modification to payment model possible• Customer service portal• Electronic Bill Presentment

Current & Future InitiativesPotential Additional Channels

• Online Banking Payments• Recurring Payments• Outbound Messaging

– Can be integrated with payment IVR

• Mobile/SMS Payments

• Electronic Bill Presentment

Current & Future InitiativesConsumer Marketing Campaign Assistance

• Create awareness & educate consumers

• Past and future plans service:*Postcards/Direct Mail *Couponing

*Statement Messaging *Web Messaging

*Email Messaging *Bill Stuffers

*IVR Messaging *Magnets

Current & Future InitiativesConsumer marketing campaign assistance