Dealing with Customers’ Inability to Pay in Tough Economic Times

1. Dealing with Customers’ Inability to Pay in Tough Economic Times The Memphis Light, Gas and Water Perspective Jerry R. Collins Jr., P.E. President & CEO

2. Who We Are • Memphis Light, Gas and Water (MLGW) serves the City of Memphis and all of Shelby County. • 429,000 residential, commercial and industrial customers • Largest three-service utility in Nation

3. Our customers • Approximately 43 percent of customers are low income. • The unemployment rate is approximately 8.9 percent.

4. Customer Care Policy Made changes in 2008 to address the need to increase flexibility when working with customers facing extreme financial situations. Changes include: • The option of including the deposit amount on a customer’s first bill. Residential customers pay $125, but the deposit is based on credit assessment. • Not all customers are required to pay a deposit.

5. Customer care policy changes • Customers requesting extensions only need to pay 25% of their balance rather than 50%. • Balance of the bill is extended to eight days past the due date of disconnect notice. • Balances less than $400 can be extended eight days without payment. • We now allow second payment arrangements. • For a second payment arrangement, a customer must pay 50% of the remaining balance and the balance is extended until two days before the due date on the next.

6. Utility Assistance • Community Service Agency (CSA) • Must meet income guidelines • Each customer receives $500

7. Utility Assistance • MIFA/Plus-1 Metropolitan Inter-Faith Association (MIFA) • Customers add a $1 or more to their utility bill • Qualifications • loss of income within the last 90 days • medical crisis • eligible once every 2 years

8. City of Memphis Utility Assistance Program • Eligibility: • Must be 60 years of age or older and/or certified medically as being totally (100%) disabled. • Head of household. • Active utility account in applicant’s name or spouse’s name. OR • Head of household or spouse on active military deployment. • Active utility account in applicant’s name or spouse’s name. • Must have received cut-off notice.

9. MLGW…Caring for Customers

10. Special Assistance Programs • Annual Moratorium on Cutoffs for Nonpayment • MLGW defers cutoffs for non-payment for all residential customers between Dec. 15 and Jan. 14 annually.

11. MLGW Customer Special Assistance Programs • Winter Moratorium • Prevents disconnection of services from December 1 through February 28 for seniors (age 60 and above) and/or those with disabilities.

12. Deferred Payment Plan • If a customer cannot meet the Payment Arrangement criteria, MLGW may offer the Deferred Payment Plan • Conditions that may require a Deferred Payment Plan • Customers with arrears created by a “charge in” from a previous address • Customers who come out of the winter season (December, January, February and March) with unusually high winter bills • Winter Moratorium customers with large balances at the end of the program due to extreme heating costs

13. On Track • A payment program designed to help customers with limited incomes to manage debt and pay off their bills over a period of time • Focuses on education, financial management and social services • Customers must have a steady, but limited income • Owe more than $600 on their utility bill • Average 300 customers a year.

14. Net Due Date Program • For customers who receive income in the form of Social Security, Disability, government assistance or pension once per month. • Can change bill’s due date.

15. Helping Customers to Use Energy Wisely

16. Max Impact Loan Program • Home weatherization loan program • 3 percent financing. • Pay back on utility bill. • Up to 10 years to repay. • Earn less than $35,000 a year. • Can borrow up to $2,500.

17. Energy Smart Memphis • Energy education workshops • Participants take home weatherization kit worth $50

18. Energy Informers • Interact with customers in our five community offices. • Hand out a variety of brochures and discuss various energy conservation methods.

19. Giving Back • Fans and air conditioning window units to seniors and needy families to help them cope with high temperatures. MLGW purchased 200 fans and 200 air conditioning window units.

20. Rental Ordinance • Proposed by MLGW to focus on the most flagrant of problems found in rental housing. • Landlords have to rectify problems or could face environmental court.

21. Rental Ordinance requirements • Windows must be properly glazed. • Pipes and wire entries into the building must be sealed properly from the outside. • Attics must be insulated. • Heating and cooling equipment (if the landlord provided it) must be working. • Plumbing must be free of leaks.

22. TVA/MLGW Pilot • Upgrades to 130 homes with Energy Star-rated window units and additional weatherization. • Will measure customers’ usage during this cooling season and compare to last year’s cooling season.

23. Closing Remarks Always do that which is in the best interest of the customers as a whole.