May 8, 2020 – Helping low-income electricity customers is more about reducing energy consumption

According to Statistics Canada, the poverty rate has declined to a new low of 8.7 per cent in 2018, or 3.2 million people, which is down from 4.2 million reported in 2015. However, poverty numbers are not the same as low-income numbers.

UtilityPULSE’s 21st Annual National Customer Satisfaction Survey for Residential and Small Commercial customers shows six per cent of respondents say they often have a problem paying their electricity bill, while 28 per cent say they sometimes worry about being able to pay their bill.

These numbers mean over 2.2 million households and small businesses have difficulty paying their bill, and millions more sometimes worry about paying their bill—those are not small numbers. The issue is the ability to pay as one survey respondent told us: “Power is a need, not a luxury. One to two dollars may not seem like much, but to someone on a fixed income, it can mean the difference between staying warm in the winter or freezing to death.”

In every province and territory across Canada, concern about the costs of electricity remains high. Nonetheless, when we listen to residential and small business customers across Canada talk about their satisfaction with their electric utility, we can make the statement that the relationship between the customer and their electric utility is very strong. The UtilityPULSE survey shows that 85 per cent of electric utility customers interviewed would say their utility is credible and trusted.

Typical comments about costs and rising rates we’ve received:

“I am a senior—the thought of escalating rates makes us fearful!”.

“As a single person living alone, it is important to keep costs low. Some months my delivery charge is more than my usage fees.”

“As a single mother, I’ve, on occasion, had to decide between paying my bills and getting groceries. Instead of completely sucking us dry, why don’t you lower the costs of hydro and help people out in these tough times?”

Sorry to the provincial government entities, regulators, commissions, electricity system operators throughout Canada, you don’t get the same level of trustworthiness as the electric utility. Why? You are not the people on the front lines. After all, when the lights go out, when service is needed, or assistance is required to understand the bill or the industry, customers turn to their utility.

Customers rely on their electric utility to be an efficient, effective and trustworthy operating entity. The truth is, every entity, each provincial government, regulator, commission, and electricity system operator, has a substantive role to play in ensuring the electricity system is delivering the benefits of an electrified world to all Canadians.

How does this impact low-income electricity customers?

The economy is moving along at a reasonable pace, and unemployment rates are low. Yet, according to the Canadian Association of Insolvency and Restructuring Professionals, the number of personal insolvencies will grow in 2020 after the rate of filings increased 8.9 per cent in November 2019 over the same 12-month period the previous year. They go on to report, “the number of people struggling with debt in November is just the tip of the iceberg.”

Every utility will say they offer programs of support for low-income people. The problem is some of those programs are run by provincial bodies, or regulators, or other entities. Some programs have nothing to do with helping customers pay their bills, e.g., spend money on items to reduce consumption and receive a rebate/incentive. Variances in eligibility requirements and the need to contact multiple organizations to get some assistance adds to the confusion as to what role each entity has in safely and reliably delivering electricity to homes or businesses.

Maybe if we simplified the industry so that the electric utility, who is the most credible and trusted entity to customers, administered all the payment support and energy reduction incentive programs, more customers would know that relief or help is available.

What a novel idea—let the provincial government bodies, regulators, commissions and electricity system operators do the heavy lifting of defining policies (and stay out of operations). Those policies need to be less about auditing and more about supporting the electric utility’s ability to help customers pay their bills, become more energy-efficient while being focused on the safe, reliable, cost-effective delivery of electricity to homes and businesses.

About the author…

Sid Ridgley is a business leader and researcher with expertise in helping electricity industry leaders capture information, insights, feedback, and wisdom from their customers and other stakeholders. He can be reached at 905-895-7900 or sidridgley@utilitypulse.com. You can also find Sid on LinkedIn and follow him on Twitter @sidridgley.

This article—along with other great content—appears in the April 2020 edition of Electrical Business Magazine.