Low-Income Residential Electric Customers

Unpaid Electric Bills – A Growing Problem

Collecting unpaid electric bills has become a major and growing challenge to electic utilities as the number of low or no-income customers grows with changing economic conditions. Since 2006, utilties have seen a 70 to 80 percent increase in their uncollectible receivables, requiring the industry to implement programs that rely on the collaboration between the electric utilities, low-income support organizations, local state governments, and those knowledgeable of the broad array of energy efficiency options.

Low-Income Program Elements

Electric utilities typically offer several rate and payment related programs to low income customers. These programs include:

• Fuel Assistance, typically subsidized by State governments to reduce the costs of energy-related services.
• Energy Efficiency Programs (weatherization) to lower one’s energy needs by improving enerty efficiency, and
• Discounted Rates, offered by utilities to lower the costs of energy use.

Low-Income Program Benefits

With subsidies and reduced rates, participants in low income programs typically save as much as 30 percent on their energy bills and additional savings are possible through a number of energy efficiency programs targeted especially for low income customers. The end result is a win-win-win situation:

• Low income customers receive electricity-generated energy at costs more in line with what they can afford.
• Utilities experience fewer late payments and write-offs.
• Local economies enjoy an infusion of new jobs to develop and implement these programs.

Ignoring the opportunity provides no benefit to any stakeholder. Unpaid receivables continue to rise, a contentious relationship develops between the electric utilities and the customers they serve, and the legislators and regulators are left to mediate a situation with no possibility for a positive outcome.

For an example of a program that has provided the benefits described above, refer to www.energybucks.com.