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Economic Woes Wallop Utilities

Author: Vikas Mukhi | | October 30, 2018

The Great Recession of 2007-2009 continues to play havoc with the nation’s utility companies. Revenues have dropped as consumers remain hampered by falling incomes and rising costs. Technology offers tools and strategies to help both customers and companies balance disparate needs.


Addressing the Plight of Today’s Utility Customer …


The Great Recession caused thousands of Americans to lose their jobs and their earning capacity. Many were unable to pay their utility bills and, by the end of the debacle, the number of uncollectible utility accounts rose by 60 percent, hitting $1.53 billion. These days, the number of uncollected accounts is still significant; in 2017, in just Texas and California, more than 1.5 million households had their utility services shut off because of unpaid bills. By 2020, upwards of one-third of all U.S. households will have difficulty paying their water bills.

There are many reasons why so many people will continue to struggle with this issue. One reason is that the current administration has terminated of the Low Income Home Energy Assistance Program (LIHEAP), which will leave millions of households with no resources for electricity payments. Another reason is the fact that many workers today are underemployed and therefore, unable to afford the full complement of household services, including utility services. Making matters worse: between 2007 and 2016, the Energy Department estimates that residential power prices rose 18 percent.


… Despite Eroding Utility Controls


For decades, the standard response to unpaid utility bills was to shut off the supply. While many utility companies still resort to this difficult ‘solution,’ governments have added rules to restrict the process. Most states now have rules protecting utility access for the elderly, families with children, the disabled, and people with medical conditions that require power equipment for support. Utility companies in areas where there are large numbers of these populations often must absorb the fluctuating costs of maintaining those services despite reduced (or sometimes no) payments.

For all of these reasons, today’s power companies are struggling to remain profitable while also maintaining a sometimes life-affirming connection with their customers. Fortunately, they are finally finding a valuable resource in today’s emerging utility-facing technology.


Prevent Before Repair


Today’s utility-based technology helps service providers obtain the necessary data to both understand and better serve all their customers, including those people more likely to default on their bill. Knowing the customer’s circumstances is the first priority.

Be proactive with analytics

Technology provides the data needed to make appropriate decisions based on current circumstances.

  • Smart meters can feed databanks with current usage information on an hourly basis.
  • Disaggregation of usage – separating usage out by equipment, devices, or time of use – gathers more specific data to streamline services (and billing).
  • Sensors can identify faltering systems before they fail.

Maximize customer relations

  • when establishing service

Most utilities already pull credit scores for potential customers and use that information to determine the relative risk they pose for non-payment. Technology can find additional relevant information that further informs the utility company of just what obstacles any particular customer might pose so it can tailor its services accordingly.

  • when providing service

Technology can also track how existing customers are faring. Catching late-payers early in that situation allows outreach to help them get caught up or avoid the problem in the future. Analytics can scan all aspects of the customer relationship – building a true 360-degree view of the customer – to provide a full evaluation of both the customer and their usage of the utility service.

Assist vulnerable populations

While government rules might prohibit disconnects, they don’t prevent any utility company from connecting those vulnerable customers with the local and state resources that can help them avoid the shut-off.

Today’s utilities have never been more stressed to provide more services with fewer resources. Technology can help them rise to that challenge.

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Analytics and utility companies

For additional resources on analytics and utility companies please download white papers: “Analytics: The Customer-Friendly Collections Solution” and “Advanced Analytics Technology Enhances Utility Management.”

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