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Responding to the Growing Needs of At-Risk Customers

Responding to the Growing Needs of At-Risk Customers. Utilities respond to the growing number of customers struggling to pay their energy bills. Becky Harsh Director, Consumer Retail Policy Edison Electric Institute. Energy, Food, and Raw Materials Prices Are Rising Dramatically. 224%. 156%.

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Responding to the Growing Needs of At-Risk Customers

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  1. Responding to the Growing Needs of At-Risk Customers Utilities respond to the growing number of customers struggling to pay their energy bills. Becky Harsh Director, Consumer Retail Policy Edison Electric Institute

  2. Energy, Food, and Raw Materials Prices Are Rising Dramatically 224% 156% 103% 59% 45% 30% 34% Source:Producer Price Index (Bureau of Labor Statistics, U.S. Department of Labor)

  3. Recent Trends Indicate A Rise in Both Poverty …

  4. … and Consumer Debt

  5. One-Third of Americans Shoulder Major Energy Burden • Income spent on energy for households earning • >$50,000 / year - 7% of income • $10,000 - $30,000 / year – 20% of income (25% of households) • <$10,000 / year - 46% of income (8% of households) • Households earning < $30,000 • Mostly senior citizens, single parents, and minorities • Force hard decisions about what bills to pay … housing, food, education, health care, and other necessities Sources: Redefining Progress; U.S. Census Bureau, Current Population Survey, 2006 Annual Social and Economic Supplement

  6. Growing Number of Customers Facing Financial Hardship The Bull’s-Eye is Growing

  7. New Customer Population • Struggling and At-Risk Customers • Difficult to Identify • Moderate to Medium Income • First Timers • Lack Information and Education on Options • Don’t Qualify for Assistance Programs

  8. Difficult to Identify • Difficult to define due to lack of indicators • No income indicator – not defined by any known federal standard • Haven’t participated in existing assistance programs before • Utilities lack data on positive payment history • Negative payment history isn’t always a good indicator

  9. A New Set of Challenges • Respond to comprehensive energy and climate legislation • How do you minimize compliance cost impacts on low-income and at-risk consumers? • What must be done to ensure participation of all customer segments, allowing them to take advantage of the programs and opportunities created through the legislation? • Developing regulatory models which stimulates new investment , provides timely cost recovery, and equitably transforms our society to a greener and more energy efficient economy

  10. Impacts on Utilities Delinquencies Disconnections Arrearages Write-Offs Funding Buy-In Programs

  11. Impacts on Utilities • Southern California Edison • Number of Accounts Past Due and Sent 2-Day (48 Hour) Notice of Disconnection increased from 5,179,504 in 2007, to 5,570,647 in 2008. • Number of Accounts Granted Bill Payment Assistance increased from 1,398,216 in 2007, to 1,520,812 in 2008. • Michigan Gas Utilities • Number of customer delinquent increased from 39,304 in April of 2008, up to 44,350 in April 2009. • Number of delinquent arrears older than 90 days went up from $2,030,426 in 2008, to $3,386,867 in 2009.

  12. Impacts on Utilities • Kansas City Power and Light • Jan - May of 08 vs 09 - sent out 561 more notices this year, with the total arrears dollars up $6.9M over last year. Just in the month of May 2009, arrearages were up $1.8M compared to May of 2008. • Wisconsin Public Service Corp. • Amount of dollars delinquent went up from $32,600,233 in 2008, to $36,216,829 in 2009. • Number of customers eligible for disconnection in 2008 was 71,697, in 2009 it is up nearly 2,000 customers to 73,545 in 2009.

  13. Call to Action Utilities are pulling out all the stops to develop new, creative ways to help customers. • Education/Information • Community Outreach • Leverage Existing Programs • Collaboration with regulators, consumer advocates and community organizations • Utilizing Outside Funding Mechanisms

  14. Education Education is the key. • Energy Efficiency Program Information • Available Payment Options • Available Assistance Programs • Resources

  15. Community Outreach Building Trust Through Community Outreach • Partnering with churches, civic groups, community leaders, retailers, etc. • Workshops and Expos • Increase Visibility

  16. Leveraging Existing Programs Leverage Internal Resources • Training CSRs to better identify customers who need assistance • Expand Payment Options • Data Mining for Better Customer Information • Adapt Existing Programs

  17. Collaboration Invest in Valuable Partnerships • Working with Regulators and Consumer Advocates to Find Solutions • Partner with State Energy Offices and CAP Agencies • Connect with Legislators

  18. Funding Mechanisms Leverage outside funding sources. • Stimulus $$ • Available State and Local Grants • Private Sector Resources

  19. Questions?? Becky Harsh Director, Consumer and Retail Policy Edison Electric Institute bharsh@eei.org 202-508-5563

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