Kevin’s Corner: Curbing the Disconnection Crisis

Published 10/3/24

Every day, we all rely on utilities for basic services in our homes like water, electricity, heating and cooling. Shutting off any of these services is a major disruption. It deeply impacts the household affected and is a challenging decision for a utility in terms of when and even how to disconnect. In most cases, someone from the utility needs to go into the field to perform the disconnection, which is both time-consuming and creates a safety risk.

Lack of essential utilities like air conditioning in the summer or heat during the winter can potentially escalate into life-threatening scenarios. Alarmingly, a significant number of Americans are at risk of losing access to these services due to missed or forgotten bill payments. In 2022 alone, energy providers disconnected electricity for an estimated 3 million customers who had failed to settle their accounts. This growing issue not only threatens the comfort but the very survival of millions, marking the urgent need for intervention and change.

Utility organizations can have a hand in curbing this disconnection crisis. If service providers can identify common reasons for missed payments, they can deploy strategies and solutions to prevent accounts from going delinquent.

Let’s explore a few causes of late or delinquent utility payments and some corresponding solutions.

1. Customers are Unaware Payments are Due

Whether it’s forgetfulness or some other circumstance keeping customers in the dark, communication is critical for avoiding this issue.

Payment reminders are key to encouraging regular, timely payments. Ideally, these reminders should be branded so it’s clear which organization they’re from. They should also include important information like the amount due and how customers can immediately pay their balance. Enabling multiple reminders can increase the likelihood of receiving payment before the due date.

If customers are resistant to standard payment reminders, personalized communication strategies can be more effective. Leverage existing customer information (geographical location, preferred communication channels, services they receive, etc.) to provide tailored reminders and late payment notices. These communications can even share information on updated hours, shut offs, and emergencies.

Finally, encouraging customers to enroll in automatic or scheduled payments can ensure settled accounts every cycle. AutoPay options aren’t for everyone but can provide a low maintenance solution for many forgetful customers.

2. Customers Have Limited Computer Access

Online payments may be a convenient and popular option for many bill payers, but computers are not available to all people. More than 14 million households across the U.S. don’t have internet. This makes accessing online bill payment portals via a laptop or home computer a significant challenge.

However, mobile devices can keep the digital door open for a much wider population.

The PEW Research Center found 97% of Americans have mobile phones, including the unbanked population. Since cellular data can establish an internet connection for those without standard broadband, millions of utility customers are able to use their mobile devices for quick, convenient bill payments.

To cater to these customers, utilities must offer an optimized mobile payment experience. Use online portals configured specifically for mobile devices. Promote mobile wallets like PayPal and CashApp, and ensure there’s an automated pay-by-phone system in place (also known as IVR).

3. Checks are Late or Stolen

Traditional mail is not the most reliable option for bills or their corresponding payments. Besides the slow pace of this delivery method, the U.S. Treasury reports check fraud has increased nationwide by 385% since the pandemic.

Combat this challenge with a two-prong approach: Educate customers on the dangers of using checks for payment while advocating for digital alternatives. One effective strategy is promoting digital payment options on paper bills and envelopes to encourage online adoption.

These alternatives aren’t limited to traditional online portals. For example, those who prefer writing checks are largely open to options like IVR. Utilities must actively promote all self-service routes to successfully discourage check use.

Make Utility Payments Easy to Find, Use, and Enroll in

The reality of the disconnection crisis goes beyond these circumstances. Many utility customers cannot afford to pay for their essential services, and these cases deserve thoughtful, empathetic solutions from providers.

However, this isn’t the only cause of endemic shut offs. Many people have the funds and forget about their payments. Others are stuck using inefficient payment methods due to access or old habits. These are the scenarios utilities can avoid by making self-service options easy to find, use, and enroll in for everyone.

Committing to expanding this awareness and access is a huge step providers can take toward slowing the disconnection crisis. Keeping customers informed about their accounts and the payment options available to them is critical for ensuring the safety of communities everywhere.

With gratitude,

Kevin