Creative Low-Income Programs

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Creative Low-Income Programs

Sarah FiebigerSenior Analyst, Market Research Services

@ESourceSarah

March 14, 2011

Monday, March 14, 2011

www.esource.com || © 2011 E Source2

Cycle of Delinquency

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Can’t afford bills

Arrears add up

1-time $ assistance

Disconnect avoided


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


LIHEAP FUNDING

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


Breaking the Cycle of Delinquency

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Can’t afford bills

Arrears add up

1-time $ assistance

Disconnect avoided

Programs promotingpayment behavior

change

Better-paying customer!


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


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

http://www.alleghenypower.com/Energy%20Assistance/PA%20EAP.asp


Allegheny Power’s LIPURP ProgramResults

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

http://www.puc.state.pa.us/general/pdf/USP_Evaluation-AlleghenyPower.pdf


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


Different Spin for “On Track” At MLGW

Source: http://www.mlgw.com/SubView.php?key=res_ontrack

http://www.mlgw.com/SubView.php?key=res_ontrack


PPL’s OnTrack Program

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


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


SRP’s M-Power ProgramResults

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


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

http://www.dteenergy.com/residentialCustomers/billingPayment/paymentPrograms/payAssistance.html#lowincome


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


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


For More Information

Sarah Fiebiger

Senior Analyst, Market Research Services

303-345-9126 [email protected]

Twitter: @ESourceSarah

Have a question? Ask our experts: www.esource.com/question

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