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Programs That Help Customers Pay Regularly and On-Time

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Programs That Help Customers Pay Regularly and On-Time

  1. 1. www.esource.com Programs That Help Customers Pay Regularly and On-Time Sarah Fiebiger Senior Analyst, Market Research Services @ESourceSarah June 17-18, 2010 June 17-18, 2010
  2. 2. www.esource.com || © 2010 E SOURCE2 © E Source The Changing Face of Delinquency Typical delinquent customer demographics Single Low income Renter Urban New delinquent customer demographics Single Married Low income Middle income Renter Home- owner Urban Rural Suburban
  3. 3. www.esource.com || © 2010 E SOURCE3 4 Primary Groups Struggling to Pay Payment- Troubled Customers Overextended customers Careless payers Single- income families No- income households Behavioral Economic © E Source
  4. 4. www.esource.com || © 2010 E SOURCE4 One-Time $ Assistance Courtesy: stock.xchng
  5. 5. www.esource.com || © 2010 E SOURCE5 Breaking the Cycle of Delinquency © E Source Can’t afford bills Arrears add up 1-time $ assistance Disconnect avoided Programs promoting change in payment behavior Better paying customer
  6. 6. www.esource.com || © 2010 E SOURCE6 Courtesy: iStock Auto Pay EFT Bank Draft Braille Billing Credit Card Debit Card Check IVR Web Cash Kiosks Prepay Budget Bill E-Bill Mail Robust Set of Billing & Payment Options
  7. 7. www.esource.com || © 2010 E SOURCE7 Automatic Payment Plans  ~1/3 of delinquent utility customers have the money to pay, they just didn’t  Auto pay plans alleviate the need to think about paying utility bills  Not great for fixed income customers Courtesy: Salvatore Vuono
  8. 8. www.esource.com || © 2010 E SOURCE8 Be on Auto Pay—U Could Win an iPod! Slource: www.portlandgeneral.com
  9. 9. www.esource.com || © 2010 E SOURCE9 Levelized or Budget Billing  Great for fixed incomes  Makes budgeting easier  Customers like it Source: Avista Utilities Source: Consumers Energy
  10. 10. www.esource.com || © 2010 E SOURCE10 Budget Billing True-Ups  Be careful with annual true-ups  To help avoid large true-ups  Account for current months’ rate  Quarterly or 6 month reviews  Rolling average Image courtesy: stock.xchng
  11. 11. www.esource.com || © 2010 E SOURCE Wisconsin Power and Light Minimum Payment Option 11 Minimum Payment Option Minimum Payment (%) April 30 May 40 June 50 July 60 August 60 September 60 © E Source; data from: Wisconsin Power and Light press release. “Utility Moratorium on Disconnect Ending.” April 12, 2010. Other Utilities with Minimum Payment Option: Peoples Gas, We Energies, and Wisconsin Public Service
  12. 12. www.esource.com || © 2010 E SOURCE12 Connecticut Natural Gas Matching Payment Program Other utilities with Matching Payment Programs: Connecticut Light & Power, Southern Connecticut Gas Co., United Illuminating, Yankee Gas CNG Customer Bill Balance $3,500 Energy Assistance Commitment (500) MPP $s Paid by Customer ($120 for 6 mos.) (720) Total Customer Payments and EA $s ($1,220) Remaining Bill Balance $2,280 Matching Payment Program $s (1,220) Customer Balance 1,060 Remaining Bill Balance $2,280 © E Source; data from: http://www.cngcorp.com/MediaLibrary/2/3/Content%20Management/CNG/YourAccount/PDFs%20and%20Docs/CNG%20MPP%20english%2010-09.pdf
  13. 13. www.esource.com || © 2010 E SOURCE13 Allegheny Power’s Low-Income Payment & Usage Reduction Program 36% 8% 11% 18% 26% 0% 20% 40% 60% 80% 100% <5 payments/ year 5 or 6 payments/year 7 or 8 payments/year 9 or 10 payments/year 11 or 12 payments/year Axis Title Payment Frequency © E SOURCE; data from: http://www.puc.state.pa.us/general/pdf/USP_Evaluation-AlleghenyPower.pdf Percent of LIPURP accounts 3% 2% 62% 33% 0% 20% 40% 60% 80% 100% Level 4: termination Level 3: field visits Level 2: letters and calls Service Level 1 ServiceLevel 17% 0% 20% 40% 60% 80% 100% 90 days overdue at end of study
  14. 14. www.esource.com || © 2010 E SOURCE14 Results from Joining Allegheny Power’s LIPRUP  Average payment frequency increased  Average payment amount increased  Percent of asked amount paid increased  Total revenue increased before assistance payments added  Service level improved  Balances decreased  Total savings at least $24.37 per account per year © E SOURCE; data from: http://www.puc.state.pa.us/general/pdf/USP_Evaluation-AlleghenyPower.pdf
  15. 15. www.esource.com || © 2010 E SOURCE15 KeySpan Gas Helps Customers Get “On-Track”  18 month arrearage program  Includes:  Arrearage forgiveness  Hiring of social workers  Hiring of dedicated CSRs to teach customers budgeting and other necessary skills  Four distinct services:  Financial and energy management  Consistent customer support  Social services referrals and case management  Arrears forgiveness
  16. 16. www.esource.com || © 2010 E SOURCE16 Results From KeySpan Gas’ “On Track” Decreases Disconnections for nonpayment Down 62% Field collection actions Down 75% Office collection actions Down 34% Increases Use of LIHEAP and other grants Up almost 200% Total payments Up at least 5% © E Source; data from Electric Light & Power
  17. 17. www.esource.com || © 2010 E SOURCE17 Different Spin for “On Track” At MLGW
  18. 18. www.esource.com || © 2010 E SOURCE Quick Hit—Third-Party Notification Source: www.pge.com/myhome/customerservice/financialassistance/thirdpartynotification/
  19. 19. www.esource.com || © 2010 E SOURCE19 Quick Hit—United Way 211  Several states support  Customers can receive information  Can get connected with resources  Payment assistance  Child care  Elder care  Etc.
  20. 20. www.esource.com || © 2010 E SOURCE20 Quick Hit—Direct Customers to Free Credit Counseling Services  DTE Energy works with Greenpath Debt Solutions  Provides free counseling services to customers with over $300 in arrears  4 of AGL Resources’ 6 natural gas utilities direct customers to the Consumer Credit Counseling Service (a non-profit financial counseling agency) Courtesy: FreeDigitalPhotos.net
  21. 21. www.esource.com || © 2010 E SOURCE21 Getting Customers To Pay Regularly and On Time  Understand who your customers are  Understand why customers struggle to pay  Have a variety of billing and payment options and assistance programs  Match customers with the options and programs that address the roots of their payment problem  Offer combined programs that address several needs of delinquent customers like the ones at Allegheny Power and KeySpan Gas  Try getting approval to open up the programs you have to more customers
  22. 22. www.esource.com || © 2010 E SOURCE22 For More Information Sarah Fiebiger Senior Analyst, Market Research Services 303-345-9126 sarah_fiebiger@esource.com

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