Utility programs designed for low-income customers to avoid delinquency. We share what six utilities are doing to help these customers and what these programs can provide.

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Creative Low-Income Programs
Sarah Fiebiger
Senior Analyst, Market Research Services
@ESourceSarah
March 14, 2011
Monday, March 14, 2011

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Cycle of Delinquency
© E Source
Can’t afford bills
Arrears add up
1-time $ assistance
Disconnect avoided

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Why try to break the cycle?
 Utility Delinquencies continue to run high
 Unemployment still very high
 Economy recovering slowly
 Utility revenues are flat
 Social agencies being pushed to the limit
 Donations down
 LIHEAP funding dollars are down

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LIHEAP FUNDING
Source: U.S. Dept Health and Human Services http://liheap.ncat.org/Funding/lhemhist.htm

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Breaking the Cycle of Delinquency
© E Source
Can’t afford bills
Arrears add up
1-time $ assistance
Disconnect avoided
Programs promoting
payment behavior
change
Better-paying
customer!

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Commonly Found Features of
Creative Low-Income Programs
 Provides assistance from utility advisors or
social workers
 Teaches budgeting skills
 Enrolls in budget billing
 Provides arrears forgiveness
 Referrals for additional assistance

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Allegheny Power’s LIPURP Program
(Low-Income Payment and Usage Reduction Program)
 Affordable monthly payments
 Supplemental grant to help customers keep their
monthly bill current. Customers must pay LIPURP
payments on time.
 2% pre-program arrearage forgiveness when
monthly payments are made
 Referrals for additional assistance
Source: http://www.alleghenypower.com/Energy%20Assistance/PA%20EAP.asp

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Allegheny Power’s LIPURP Program
Results
 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

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National Grid’s “On-Track” Program
 Successful 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

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Different Spin for “On Track” At MLGW
Source: http://www.mlgw.com/SubView.php?key=res_ontrack

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PPL’s OnTrack Program
http://www.pplelectric.com/Residential+Customers/Pay+My+Bills/Need+Help+Paying+Your+Bill/OnTrack.htm

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SRP’s “M-Power” Pre-Paid Metering
Program
 Started out as a low income program
 Over 109k customers enrolled (not just low income)
 Cost to enroll is $99 compared to a $275 deposit
 Customers avoid disconnection on past due balance
 92 Pay Kiosks located throughout territory
 Portion of each payment goes to past due balance
 Customers can monitor their usage and the cost of
electricity on an in-home display

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SRP’s M-Power Program
Results
 92% customer satisfaction rating among pre-paid
customers
 95% say they now have more control over their
usage
 On average, 12% less energy used (6% bill savings)
 Customers buy power at their convenience
 Arrears are paid off incrementally with each energy
purchase
 Great option for unbanked (cash-only) customers
who small payments around 8-10 times per month

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DTE Energy
Credit Counseling Service
 Works with GreenPath, non-profit agency
 Available to all customers with >$300 arrears
 Assist customer to develop budget to manage
money
Source: http://www.dteenergy.com/residentialCustomers/billingPayment/paymentPrograms/payAssistance.html#lowincome

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What Might The Ultimate Creative
Low-Income Program Provide?
 Affordable monthly payments through:
 Budget billing enrollment
 Arrearage forgiveness for on-time payments
 Supplemental grants such as L.I.H.E.A.P.
 The budgeting and financial skills necessary to stay
a regularly good-paying customer through:
 Personal assistance from utility advisors or social workers
 Training or information on budgeting and financial skills
 Referrals for additional assistance
 Usage monitoring through in-home display or online

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Key Takeaways
 Be creative!
 Some customers are chronically delinquent
 Bundle old programs for an all-encompassing
package that tackles the full cycle of delinquency
 Many customers don’t have resources to change
 Design low-income programs to help reduce
monthly payment amounts
 Grants, donations, assistance are getting scarce
 Money invested in a creative low-income program
can reap rewards moving forward

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For More Information
Sarah Fiebiger
Senior Analyst, Market Research Services
303-345-9126 sarah_fiebiger@esource.com
Twitter: @ESourceSarah
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