creative low-income programs
TRANSCRIPT
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Creative Low-Income Programs
Sarah FiebigerSenior Analyst, Market Research Services
@ESourceSarah
March 14, 2011
Monday, March 14, 2011
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Cycle of Delinquency
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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
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Can’t afford bills
Arrears add up
1-time $ assistance
Disconnect avoided
Programs promotingpayment 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 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
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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 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
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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 [email protected]
Twitter: @ESourceSarah
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