Replacing a utility billing system is one of the most important procurements a utility provider can run. According to the US Office of Energy Efficiency and Renewable Energy, organizations that simplify their processes for accessing utility data reduce their time spent on data collection by about 10%–33%. A utility billing request for proposal (RFP) has to outline rate engine requirements (i.e., how complex the billing system must be for accuracy) as well as integration architecture, regulatory reporting obligations, payment channel diversity, and migration risk. It must do so with enough specificity that vendors can respond accurately and evaluators can distinguish between them. A poorly written RFP might solicit the wrong vendors.

Below, we’ll discuss what a utility billing RFP should include, how the procurement process works, and how to evaluate vendor responses effectively.

Highlights

• A utility billing RFP should specify the required rate engine complexity, integration architecture, and payment channels.

• The procurement process from RFP issuance to contract award can be lengthy, with risk concentrated in data migration and integration scope rather than in vendor selection itself.

• Effective evaluation means going beyond proposal scores and going into specifics. Good techniques include migration samples, direct conversations with the team you’ll work with, and demo scenarios built from your own data.

What is a utility billing RFP?

A utility billing RFP is a formal procurement document that municipalities, cooperatives, and private utility providers (depending on who owns and operates the utility) publish when they’re evaluating vendors for billing software, payment processing, or managed billing services. It defines what the issuing organization needs, how vendors should respond, and how those responses will be scored.

What should a utility billing RFP include?

Strong RFPs both describe outcomes and specify requirements. This tells vendors what kind of information to give and makes evaluation easier and more effective.

Here’s what to include.

Context and scope

Start with why you’re issuing the RFP. Describe what system you’re replacing and why it’s no longer sufficient. Specify the number of active accounts, the monthly bill volume, the number of service types billed, and the current billing cycle structure.

Needed services

Many utility billing platforms cover services natively or through integrations. Explain what you need (e.g., meter data ingestion and validation, a rate calculation engine, invoice generation, payment processing, customer account management). Specify which of these should be core product functionalities or whether it’s acceptable to handle them as separate integrations.

Technology integration requirements

List every system the billing platform needs to connect with (e.g., enterprise resource planning, advanced metering infrastructure, geographic information, any state or federal regulatory reporting). Clarify whether you require application programming interfaces (APIs) that conform to Representational State Transfer (REST) architectural style (i.e., REST API access), what authentication standards you expect, and whether vendors must provide sandbox environments for preproduction testing.

Implementation, migration, and support

Data migration from legacy customer information systems is often an expensive, time-consuming part of a billing system transition. Require vendors to detail their conversion methodologies, proposed timelines, and postlaunch service-level agreement (SLA) commitments.

Security and compliance

Describe your regulatory environment. At a minimum, vendors should be able to provide Payment Card Industry Data Security Standard (PCI DSS) compliance documentation, System and Organization Controls (SOC) 2 Type 2 audit reports, and disaster recovery documentation. And they should define targets for one of two factors:

• Recovery point objective, the maximum amount of data loss an organization can tolerate after a disruption
  
• Recovery time objective, the time frame in which processes must be restored
  

Pricing structure

Require vendors to price in a format that enables direct comparison. Ask them for up-front costs itemized separately from ongoing fees, transaction fees for each payment method, and per-account pricing at your current account volume as well as at 110%, 125%, and 150% of that number.

How does the utility billing RFP process work?

The timeline for the utility billing RFP process typically involves several steps from initial drafting to contract negotiation. Here’s how the process works:

• Drafting and internal review: Assemble requirements from billing operations, information technology (IT), finance, and customer service. Public utilities require a legal review of the RFP document before publication.

• Publication and questions and answers (Q&A): Post the RFP publicly via your website, state procurement portals, or services like BidNet Direct and DemandStar. Then, give vendors time to submit written questions. Issue any written answers as formal addenda. These become part of the official procurement record and are binding on both sides.

• Proposal scoring: Score vendor submissions against the weighted criteria defined in your RFP. These should cover a vendor’s technical capability, approach, financial stability, references, and price. Evaluation committees typically score independently before they convene to compare results.

• Oral presentations and demonstrations: Choose a few vendors and ask them to demonstrate the system using scenarios drawn from your rate structures and account types.

• Reference checks and final selection: Contact references at utilities of comparable size.

• Contract negotiation: Come to an agreement with your chosen vendor. The RFP and the winning vendor’s proposal might become exhibits to the final contract in case disputes arise.

How are utility billing RFPs different from other RFPs for software?

Many software RFPs seek a product. Utility billing RFPs look for a system that works correctly every month under regulatory scrutiny.

Here’s what winning systems must be able to handle.

Rate complexity

Unlike retail software-as-a-service (SaaS) billing tools, which tend to work on fixed or tiered pricing, utility billing systems need to handle complicated rate calculations. The system might have to calculate a single customer’s bill using an inclining block rate, a low-income assistance discount, a storm recovery surcharge, a demand charge for time-of-use customers, and a paper bill fee—all on the same invoice.

Regulatory reporting

Electric, gas, and water utilities generally face strict reporting requirements. The billing system is often the recordkeeping system for this data so data integrity and auditability requirements are more stringent than in most commercial billing contexts.

Customer vulnerability protections

Many jurisdictions have rules that govern disconnection notice periods, medical baseline protections, and payment arrangement requirements. The utility billing platform must enforce these rules consistently.

How should you evaluate responses to a utility billing RFP?

Score proposals against your stated criteria, but consider going further. Ask applicants to work with you to better understand their teams, the overall cost, and how they’ll handle the most important issues.

Here are some ways to enhance your evaluation:

• Build demonstration scenarios from your own data: Ask the top vendors to calculate bills for a set of real accounts with complicated rate structures during their demonstrations. Using your scenarios will tell you whether the system can bill the way you need to.

• Request a data migration sample: Data migration can be one of the most difficult parts of switching to a new billing system. To reveal potential problems, provide a sanitized data extract from your current system and ask vendors to show it to you after conversion.

• Check references without a script: Every implementation has problems. Ask references about their own project difficulties to see how applicants responded when things didn’t go as planned.

• Speak with the implementation team: The people who take part in sales presentations are often not the people who will run your implementation. Ask for some time with the team you’d be working with so you can understand their level of experience with systems similar to yours.

• Model total cost of ownership over 10 years: Instead of relying on per-account fees, ask vendors to provide a 10-year total cost of ownership. This estimates direct and indirect costs involved in acquiring and operating a product or system over that time, using your account volume and transaction volume, including up-front costs.

How does modern billing infrastructure support utility RFP goals?

The best billing platforms do more than generate invoices. When you evaluate modern platforms against your RFP criteria, look for these capabilities:

• Unified billing and payments: Platforms that run billing and payments on the same infrastructure minimize reconciliation problems and reporting gaps that come from stitching together separate systems. When the data flows cleanly between billing and payments, your reporting reflects what actually happened rather than what two systems agreed on after the fact.

• Speed of deployment: The gap between a signed contract and a working billing solution used to be measured in months. Well-designed platforms can now go live in days. New pricing models can be deployed in minutes without requiring a full development cycle.

• Revenue recovery: Failed payments are unavoidable at scale, and how a platform handles them directly affects cash flow. Platforms that own both the billing and payment layers hold more end-to-end payment data than third-party recovery tools, which makes their retry logic and machine learning more effective.

• Global capability: Platforms built for global deployments handle currency conversion, local payment methods, and language support natively rather than through integrations. This is relevant for any utility with commercial or industrial accounts that operate across borders.

• Reliability and uptime: Billing runs on a fixed cycle. A platform that fails on invoice generation day or during a payment processing window creates cascading problems. Look for documented uptime commitments backed by architecture designed for reliability.

Stripe Billing covers all of these capabilities, unifying billing and payments on one platform that’s built for global use.

How Stripe Billing can help

Stripe Billing lets you bill and manage customers however you want—from simple recurring billing to usage-based billing and sales-negotiated contracts. Start accepting recurring payments globally in minutes—no code required—or build a custom integration using the API.

Stripe Billing can help you:

• Offer flexible pricing: Respond to user demand faster with flexible pricing models, including usage-based, tiered, flat-fee plus overage, and more. Support for coupons, free trials, prorations, and add-ons is built in.

• Expand globally: Increase conversion by offering customers’ preferred payment methods. Stripe supports 100+ local payment methods and 130+ currencies.

• Increase revenue and reduce churn: Improve revenue capture and reduce involuntary churn with Smart Retries and recovery workflow automations. Stripe recovery tools helped users recover over $6.5 billion in revenue in 2024.

• Boost efficiency: Use Stripe’s modular tax, revenue reporting, and data tools to consolidate multiple revenue systems into one. Easily integrate with third-party software.

Learn more about Stripe Billing, or get started today.