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CEAP Helps Customers Reduce Overdue Balances and Utilities Manage Collections Risk

Starting July 13th, utilities began accepting customer applications for the COVID-19 Energy Assistance Program (CEAP). This one-time bill credit provides up to $115 for electricity[1] and $80 for gas, helping customers reduce overdue utility bill balances. Total funds available is limited, however, capped at $4.88 million for electric distributors to be disbursed on a first-come, first-serve basis.



Specifically, CEAP targets customers who were in good standing with their utility prior to March 17th, but due to COVID-19, suffered related job or income loss and have overdue balances from 2 subsequent bills. It is important to recognize that this self-identified customer segment were good paying customers prior to COVID-19. As such, this segment may represent lower collections risk, through reduced delinquency rates and broken payment arrangements, potentially justifying utilities offering more favorable payment plan terms. Non-eligible customer segments enquiring about CEAP are also showing an intent to reduce their overdue utility balance and present a collections opportunity for utilities by working with these customers to set up payment arrangements, register them for eBilling and equal payment plans.


Despite the good intentions of CEAP, managing customer expectations will likely be a challenge. Most notably, there is a risk of funds running out, and of some customers not meeting the eligibility requirements. Utilities can mitigate customer dissatisfaction by reducing customer effort required to register for the program: this includes making forms easy to find and download on websites, as well as supporting a number of different customer channels including phone support. Utilities may also be able to help customers link to other low income and energy efficiency programs by pre-screening program eligibility. This can readily be done by adding a couple of additional questions on household size and income to the application. A well thought out customer communications initiative can also improve satisfaction by increasing customer awareness of support programs available.


Author: Kerry Lakatos-Hayward is the President of NewEnergyCustomer and is offering utilities a free initial assessment on actionable quick-wins in their customer care operations, including collections segmentation. Kerry can be reached at klh@varsync.com or (416) 627-5057.





[1] For electrically heated homes or when the customer uses an energy-intensive medical device, the maximum credit increases to $230.

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