What's the problem? Arrears! This presentation outlines how to break the cycle of delinquency and how to reduce or eliminate arrears by making bills easier to afford.

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Programs That Help
Customers Get Back
On Track
Sarah Fiebiger
Senior Analyst, Market Research Services
July 21, 2011
Thursday, July 21, 2011

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What’s the problem?
ARREARS!

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What’s the solution?
Get Them Out

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What’s the solution?
Get Them Out
Keep Them Out

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Problem with programs just designed
to get customers out of arrears…
Fixed
income
Can’t afford
bills
Arrears add up
1-time $
Assistance
Disconnect
Avoided
Cycle of
Delinquency
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Problem with programs just designed
to keep customers out of arrears…
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Problem with programs just designed
to keep customers out of arrears…
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Problem with programs just designed
to keep customers out of arrears…
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But we can break the cycle!
Fixed
income
Can’t afford
bills
Arrears add up
1-time $
Assistance
Disconnect
Avoided
Cycle of
Delinquency
Can’t afford bills
Arrears add up
Comprehensive,
Longer-term
Programs
Better-paying customer
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Design programs that attack BOTH the
symptom AND the cause
Get Them Out
Reduce or
Eliminate arrears
(symptom)
Keep Them Out
Make bills
easier to afford
(cause)

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Get Them Out!
 One time cash assistance available
through programs like LIHEAP
 Arrears forgiveness
 Matching payment plan
 Extended payment plan
 Arrears pay down

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Keep Them Out!
 Budget billing
 Percentage of income payment plan
 Prepaid metering

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À La Carte program design
Get Them Out
 One time cash
assistance (ex: LIHEAP)
 Arrears forgiveness
 Matching payment plan
 Extended payment plan
 Arrears pay down
Keep Them Out
 Budget billing
 Percentage of income
payment plan
 Prepaid metering

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À La Carte program design
Get Them Out
 One time cash
assistance (ex: LIHEAP)
 Arrears forgiveness
 Matching payment plan
 Extended payment plan
 Arrears pay down
Keep Them Out
 Budget billing
 Percentage of income
payment plan
 Prepaid metering

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À La Carte program design
Get Them Out
 One time cash
assistance (ex: LIHEAP)
 Arrears forgiveness
 Matching payment plan
 Extended payment plan
 Arrears pay down
Keep Them Out
 Budget billing
 Percentage of income
payment plan
 Prepaid metering

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À La Carte program design
Get Them Out
 One time cash
assistance (ex: LIHEAP)
 Arrears forgiveness
 Matching payment plan
 Extended payment plan
 Arrears pay down
Keep Them Out
 Budget billing
 Percentage of income
payment plan
 Prepaid metering

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Take it one step further…
Tack on a layer of customer support
and education!
 Provide using your employees
 Partner with a non-profit group
 Direct customers to call United Way 2-1-1

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The Solution!
Component 1
(Get Them Out)
Component 2
(Keep Them Out)
Customer Support & Education

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Can also include an added
bonus…
Component 1
(Get Them Out)
Component 2
(Keep Them Out)
Customer Support & Education
Weatherization

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Result: Win-Win!

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Want proof this model
is successful?

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Allegheny Power Low-Income Payment and
Usage Reduction Program (LIPURP)
 Affordable monthly payments
 Supplemental grants for on-time payments
 2% arrears forgiveness for on-time payments
 Referrals for additional assistance

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Allegheny Power LIPURP: Results
 Customers increased amount of cash payments by
an average of $40 in year following enrollment
 Customers increased average number of payments
made per year from 8.6 prior to enrollment to 9.4
after enrollment
 Customers have seen an average net decline in
their energy burden of 3 percentage points

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Illinois Percentage of Income Payment
Plan (PIPP)
 Monthly payments equal to 10% of income
 Minimum payments of $10 per month
 One-time arrearage forgiveness benefit or LIHEAP
benefit

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Illinois PIPP: Results
 Customers saw reduced energy burdens
 Customers maintained or increased their number of
payments made (some elderly and child customers
did see reductions in payments made)
 Customers say their bills are easier to pay and their
level of energy insecurity improved

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Salt River Project M-Power
 Prepaid metering program
 Percentage of each payment goes towards paying
down arrears
 Reduced security deposit cost

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Salt River Project M-Power: Results
 12% reduction in energy use
 Very high customer satisfaction
 Customers can pay in small amounts as they want
 Arrears get paid down until they’re gone

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To recap…
Get Them Out AND Keep Them Out
By tackling both the symptom and the
cause using comprehensive programs that:
 Provide a means for reducing or
eliminating arrears
 Provide means for keeping energy bill
costs down
 Provide customer support and education
on budgeting and finance skills

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