Three ways utilities can better engage low-income customers

Oct. 30, 2018

Renewables, smart meters, electric vehicles, mobile apps and other features of the “utility of the future” are proliferating. But are they actually reaching all residential energy customers?

The following is a viewpoint from Patty Durand, President & CEO of the Smart Energy Consumer Collaborative

There’s been much talk within the energy industry about the “utility of the future”, which is being brought about by new, innovative technologies, sizeable infrastructure investments and evolving customer expectations, to name just a few industry megatrends.

Renewables, smart meters, electric vehicles, mobile apps and other features of the “utility of the future” are indeed proliferating, but are these technologies actually reaching all residential energy customers?

For example, what about the residential customers whose annual incomes fall below the U.S. household median?

These lower-income consumers often have an energy burden (the percentage of household income spent on home energy bills) that’s considerably higher than consumers on the other side of the U.S. median income and are arguably best positioned to benefit from the money-saving potential of new energy-saving programs, services and technologies.

To assess lower-income consumers’ priorities when it comes to home energy usage and their interests in programs and services offered by electricity providers, the Smart Energy Consumer Collaborative (SECC) mined data from five previous consumer surveys that included over 5,000 total respondents — 1,337 of whom fall into the low-income bracket (defined as annual incomes under $25,000 for this research) and 2,119 of whom fall into the low-to-middle income bracket (annual incomes above $25,000 but below $50,000, which roughly corresponds with the U.S. median household income for 2016).

The research delved into lower-income consumers’ reasons for saving energy at home, some of their key demographic features (age, homeownership, education levels, etc.), their preferred channels for communication with their electricity providers and their levels of knowledge of energy-efficient actions they can make around their homes. The meta-analysis also explored interest in a wide array of energy-related technologies, services and other offerings, including solar, battery storage, electric vehicles, real-time outage reporting, prepaid billing and peak-time savings programs.

Based on the insights gleaned from this data, we developed several opportunities for electric utilities and their partners to improve engagement with lower-income consumers and better support their unique needs. Here are three key considerations for customer outreach and program design:

1. Leverage opportunities to streamline program enrollment and cost effectiveness

Streamlining program enrollment can lower administrative costs and enable programs to reach more lower-income consumers.

In addition, adopting a more holistic approach to supporting lower-income consumers by creating dual fuel (or fuel-blind) programs, which are coordinated or jointly administered in territories with separate gas and electricity providers, can also benefit consumers. The overall goal of these strategies is to create a one-stop shop to minimize program delivery costs while maximizing the potential for energy savings.

Furthermore, electricity providers may find opportunities for engagement by reexamining their existing programs that are directed toward single-family homeowners.