Creating personal accountability for energy use

OK…that may not be the sexiest headline I’ve ever written, but it’s a juicy, giant topic. For years, Shelton Group’s Energy Pulse® has been asking consumers, “Who’s to blame for rising energy costs?” And for years the number one answer has been, “The United States Government” (see my post on this below).

In fact, for the last two years only about 22% of Americans have “gotten it” that their own consumption is to blame for rising costs. Thus 78% of the population runs around angry about rising prices and blaming somebody else for it (we’ve even heard some doozy conspiracy theories in focus groups).

Earlier this week I was presenting at the EUCI Customer Satisfaction conference and heard Scott Trout from SRP lay out an excellent cure for this condition: prepayment. Up until I heard Scott’s case study I was wary of utility pre-payment programs, thinking they somehow were unfair to low-income customers. The way it works is much like long-distance phone cards: the customer decides in advance how much he is willing to pay toward his utility bill each month and purchases that amount in advance of his use. He has a special unit installed on his house so he can push a few buttons and check as the month progresses how much of his allowance he’s used, what he’s averaging per day, etc. That way he can manage his usage up or down to come in at his allotted budget.

Now, again, I’ve always feared that this leaves low-income customers high and dry — when they run out of budget they’re out of power and just sort of stuck for the month. SRP has come up with some ways to manage customers in emergency situations and over weekends that seem fair. But the big ah-hah here is that none of the customers on this plan (and it’s not just their low-income customers) feel that it’s unfair at all. In fact, quite the opposite. Customers using the pre-payment program report a 95% satisfaction rate. And they’re using 12% less energy than those on the traditional use-it-and-pay-for-it-after-you-pick-yourself-up-off-the-floor method.

And that makes sense. In Scott’s words, “it gets SRP out of the middle.” In my words, it gets the customer in charge. This plan takes the surprise away — the customer can see exactly how much power he’s using and manage his consumption accordingly. If he uses more than he’s paid for, he loses power and he understands how it happened. So a level of personal accountability is created — which is empowering for the customer — and a better relationship is built with the utility. Distrust is replaced by understanding.

The other win for the utility is in the collections department. At a time when most utilities are seeing their arrears skyrocket (the number of accounts going unpaid) SRP’s are staying steady. So, SRP collects more of its money for the product it’s selling, the customer gets to take control, and the relationship between customer and utility improves. Everybody wins!