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Technology Minimizes Utility Write-offs and Shut-offs

Author: Vikas Mukhi | 5 min read | October 18, 2018

There are many reasons why utility customers fail to pay their bills. In some cases, the utility company must absorb those losses while in other cases, they must make the difficult determination to shut off those services. Technology can help every utility company reduce the instances of both write-offs and shut-offs by providing them with the information needed to make those critical decisions.

Why Customers Don’t Pay

Most people are happy to pay for the utility services that keep their homes functioning. Sometimes, however, circumstances beyond their control prevent them from keeping up with those bills. Un- or underemployment, sickness, family demands and other life circumstances can erode a person’s income or earning ability to the point where they just can’t afford to pay all their bills. In fact, recent research reveals that America’s poorest citizens are often the ones who pay the most for their utility services.

In a survey by Groundswell, the percentage of income spent on utilities by low-income households rose by 33 percent over the last ten years. One reason for this is that low-income households don’t have the funds to buy upgraded, more efficient appliances and their older model appliances consume more energy to run. Also, they often rent their homes and don’t have the authority to make those more efficient either. When their customers suffer from distressing economic circumstances like these, the challenge for the utility company is to determine how to manage that account.

The High Costs of Write-offs and Shut-offs

Both writing off an outstanding debt and shutting off a customer’s service create challenges for the utility company:

Every utility company finds it challenging to balance these disparate yet connected concerns. However, advancing technologies now provide both the tools and the insights they need to make critical evaluations that can save both them and their economically challenged customers.

Managing the Economically Vulnerable Customer

Technology’s best role, perhaps, is how it facilitates the utility company’s effort to help a vulnerable customer retain vital utility services. Today’s analytics software gathers data that is relevant to each customer’s specific circumstances; late payment habits, paying less than the full amount billed, or missed payments are all signals of a distressed customer. Once identified, the company can determine how to improve their situation, by setting up a payment plan more suited to their finances or connecting them to local or state government services that can help cover those costs or reduce their utility usage.

Analytics can also identify where, within the distressed household, the highest utility draws originate. Analytics software can ‘disaggregate’ the data gathered from the home’s various appliances including water heaters, air conditioners, and even televisions. Reducing the use of high-energy equipment can lower the overall bill.

Not insignificantly, today’s utility programming can also give customers better insights into how they use the utilities in their home, so they can make better decisions about those activities, too.

Advancing technology is also advancing the service level of today’s utility company, for all of its customers, regardless of their ability to pay.


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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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