From late 2021, millions of households here in the Netherlands faced soaring energy prices. This was caused by great uncertainty on availability and accelerated by the geo-political context due to the war in Ukraine. These prices started to rise really quickly and it hit its peak in August 2022.
This increase combined with relatively low cancellation fees caused that energy companies were unable to offer fixed contracts to customers. The risks involved were simply too high. In short, fixed contracts are when you pay the same price per unit of consumption for your energy contract. With this change, customers were only offered a variable contract where the price per unit can change instead of being fixed for one or more years.
Sadly with this inflation, some households and small-scale users couldn't afford their energy bills anymore. This is why the Dutch government wanted to introduce something to make energy affordable for the people living here. In September 2022, the government decided that energy companies needed to introduce a price cap for their customers on January 1st, 2023.
But exactly what is a price cap?
A price cap for energy means that the tariff for your electricity and gas is limited to specific rates that were set by the Dutch government. These rates are
- Electricity: € 0,40 per kilowatt-hour/ kWh
- Gas: € 1,45 per cubic meter/ m3
With this price cap, it means that the government will subsidize a maximum usage. For electricity, it would be up to 2900 kWh in 2023; for gas, it would be up to 1.200 m3 in 2023.
In addition to this, the government also decided to give each household 190 euros in November and December 2022 to help with their energy costs. The introduction of the price cap was a general statement to the energy companies. Therefore, it initially wasn't entirely clear to the companies how it should be applied to the customer's bill.
We talked to Leon Ewals, Product Owner here at Essent, who provided us with some background information on this new implementation and his experience working on it.
His experience on this project
As the product owner, he was partially responsible for the price cap's IT development. Leon worked on how the price calculation and customer's invoice would be affected by this price cap.
Typically, before beginning a project of this nature, one must determine what is expected of them, such as what they will be building first of all. However, with this, they had to begin creating the framework for the project in September to ensure that the foundation for the price cap was already in place, though the specifics of how to apply this to the invoice changed over the course of the months. For essentially all energy companies, this was the element that presented the greatest challenge.
How were customers made aware of this price cap by Essent?
At first, they needed to email customers about how they would receive the 190 euros in November and December. They explained how this works in relation to the regular invoices of the customer. Furthermore, they explained how the price cap will be applied in 2023. For this, a multi-disciplined project team created videos, FAQs and sent lots of emails to customers. They also held Q&As with customers one-on-one and shared surveys.
They did as much as they could in the short time that they had to also get feedback from customers and also verify the communication that they drafted about the changes that were understood by them.
How is it currently going with the price cap?
Right now the price cap has been going well. Beginning of January, the first invoice was sent out to customers and the price cap discount was there and that worked. However, the further in the year the more complex the calculations will get since the period will be longer, and the complexity for customers will grow. That’s why it will be more and more important that the communication is clear.
Impact of this project
Because all departments within the company were affected, everyone had to work together to achieve this goal. Throughout the course of this project, Leon met new people from various departments. He mentions how they sometimes keep focused on their own stuff in IT, but in this case, they really needed to connect with departments like corporate affairs and communications to ensure everything went successfully.
This project allowed him to meet many new people from various departments, which was wonderful.
Moreover, many people's lives were positively affected by this price cap. So it was really nice to work on a topic like this. It's rewarding to make a difference in someone's life by making it easier for them to pay their bills and their energy costs.
When you consider the project's overall effects on society, you can definitely see its impact. This is something that does not occur in every IT project.