As winter’s frigid temperatures started to take hold in the northern states early in the heating season, consumers worried about how the escalating costs would affect their ability to adequately heat their homes. Even with the relatively mild temperatures in most areas of the country this heating season, utility bills were still at all-time highs. Some utility commissions warned further increases might come this summer.

State government and regulators took this issue very seriously. Several states established special billing practices allowing consumers additional time to pay their bills. Other states limited utilities’ collection practices to protect service until consumers were able to resolve high bills and the associated delinquencies.

While all of these options helped the consumer, the utilities were still faced with the dilemma of how to encourage prompt payment while being sensitive to the needs of their customers. One simple solution was to make it easier for the customer to pay by providing multiple payment options.

Many utilities across the country offer electronic payments by check, credit card, or pinless debit card through services provided by third-party vendors. These affordable and convenient options are offered to customers through a variety of channels to make paying their utility bill convenient. Customers have the option to pay via the web, an IVR (provided by the servicer or the utility), or through call center agents (provided by the servicer or the utility).

Customers make a payment 24 hours a day, seven days a week, from anywhere in the country. There is no registration required for these services and customers only need basic information - such as their utility account number and checking or credit/debit card number. With real-time authorization, customers are notified of approved payments immediately and all relevant payment and account information is provided to the utility electronically each day.

The trends in 2006 have indicated increased usage of these services. Compared to 2005, electronic payments have increased 16 percent (measuring January 2005 to January 2006). One major Midwest gas company saw a 38 percent increase of dollars collected using this method of payment; from $12,150,000 in January 2005 to $16,700,000 in January 2006.

Another major Midwest gas company creatively combined an outbound interactive voice messaging (IVM) program with the ease of electronic payments. Daily, the gas company calls its delinquent customers via an outbound IVM process. IVM uses prompts to advance customers through customized scripting, according to the utility’s specific goals. Since this campaign is completely automated and does not depend upon customer service representatives to deliver the messaging, the number of customers who can be contacted is extremely high. IVM is able to call thousands of customers simultaneously. And customers appear to prefer automated messaging to traditional dialer messaging. Nearly 45% of the customers called through an IVM campaign select and respond to the customized messages. Only 30% of customers contacted through a traditional dialer campaign listen to the messages.

Once the customer is identified, IVM delivers customized scripting that provides detailed information regarding the status of the customer’s account (balance, minimum payment due, and due date). The customer can choose a variety of options to satisfy the payment, including making payment by check, credit or debit card. When one of these payment options is selected, the customer enters all the necessary payment information (card number, expiration date, amount of payment) and receives a real-time authorization of the payment. The gas company is able to view a record of the payment through a real-time payment viewing portal and the payment is updated in a nightly posting file to the gas company.

The results of this outbound notification program were overwhelming. In January, nearly 50,000 accounts representing $24,000,000 of past due dollars were targeted for this customized notification program. The gas company collected more than $4,000,000 in January using electronic bill payment services. The advantage this service provides to the customer is the ability to easily pay the delinquent account. Additionally, if the customer needs more complex account servicing, the automated system can transfer the customer to a customer service representative to explain alternative options such as payment plans and assistance programs. Customers appreciate the effective, efficient method of updating their account balances as well as the immediate payment options and full account servicing.

Several other utility companies are using outbound automated calling programs to enhance their delinquency notification efforts. Budget billing, past due payment arrangements, pre-disconnection notification and early stage delinquencies all respond favorably to this type of call. In all situations, customers are given the option to satisfy their account balance through the flexible payment options offered at the time of the call. It’s a win for the utility company and a win for the customer.

Even though this year’s heating season is coming to a close and the possible impact of this year’s hurricane season is yet to be realized, high heating bills and rising delinquencies will continue to be an ever-present issue for both consumers and utility companies. Consistent focus on delinquency management and alternative strategies will aid utilities in keeping their account receivables under control. Frequent customer communication and alternative payment programs are an effective way for utilities to look to the future and not only help themselves, but also help their customers.

To join in on the conversation or to subscribe or visit this site go to:  http://www.energypulse.net

Copyright 2005 CyberTech, Inc.