Breaking the energy burden cycle

Over two-thirds of consumers across the U.S. are concerned about their ability to pay their bills, according to a new study from […]


Over two-thirds of consumers across the U.S. are concerned about their ability to pay their bills, according to a new study from Transunion. The current crisis continues to amplify the energy burden with 16% of respondents saying that they won’t be able to pay their utility bill. Utilities have stepped up to help, but are applying programs from a traditional toolbox that is far too reactive. Payment programs, budget billing and deferred payments are meant to assist people who fall behind on their bills—helping them get out of the hole. But those tools don’t help customers stay out of the hole to begin with. They only provide relief once the energy burden has become unbearable, and that’s quickly becoming the situation for millions of households as a result of the pandemic.

The Key to Breaking the Burden

The increasing risk from non-collectible revenue has risen by 2 percent in recent years according to a report from McKinsey. That same report outlined a number of recommendations to reverse this trend. By reshaping their credit and collections process through better customer onboarding, monitoring and communications, McKinsey said utilities could get ahead of the next downturn while also improving customer experience and loyalty. In a nutshell, that describes what’s needed to break the Energy Burden Cycle (see graphic below). 

The energy burden exists, in part, because today’s customers are blind to their energy usage. If their energy spikes and consumption increases, customers won’t know until the bill arrives. For those dealing with financial stress, that’s too late. In fact, it can be the tipping point. Home energy management (HEM) can help mitigate the issue by reducing the burden before people get behind on bills. With access to granular home-energy data, customers can see how individual behaviors or devices contribute to their monthly costs, empowering them to control their consumption. And, with personalized savings advice, customers can predict and prevent end-of-the-month bill surprises. 

These same insights can alert the utility when a customer is struggling to stay within an energy budget or seeing surges in energy usage. The utility can then suggest payment solutions before the customer gets into a deeper hole. 

Awareness. Control. Relief. 

We can tackle the energy burden by pairing home energy management solutions with a utility’s existing payment and assistance programs. In doing so, we can empower customers with greater control over costs while providing the insight and intelligence to identify at-risk customers—extending relief at the moment it matters most. When integrated, the solution becomes more than the sum of its parts, creating a seamless experience that gives personalized guidance to customers to keep costs in-check, but also proactively offers assistance when they get off-track.  

Awareness – Make it Accessible and Predictable

The adoption of home energy management solutions has surged since March.  Powerley’s utility partners have experienced a 60% increase in adoption of their mobile HEM solutions.  With increasing energy burdens, the uptick in adoption of energy management has been immediate. And, one key contributor to the velocity of demand has been accessibility. 

Adoption will fail if there is too much friction. This is especially true of vulnerable customer segments.  Asking households, especially those battling the burden of financial stress, to take several steps to find and adopt a new technology is not a sustainable path. However, given the high penetration of smart phones across all income levels, mobile is the natural gateway to attack energy burdens.  And, for lower income segments, mobile is often their only means to keep connected digitally.  

With instantaneous access to energy insights, Powerley’s utility partners are helping their customers realize up to 10 percent energy savings. This journey starts with easy-to-read visualizations showing trends by month or by minute. With a constant connection to a home’s energy usage, Powerley’s HEM solutions provide the insight customers need to curtail costs – delivering energy awareness down to the appliance-level via disaggregation. And, detailing behavior categories, like heating & cooling, kitchen & cooking, laundry, lighting or entertainment.

For those experiencing energy burdens, the power of prediction is essential. Not only seeing what usage is today, but what it is going to be tomorrow – stopping bill surprises before they start. Engagement with Powerley Advisor, a personalized energy assistant, shot up 34% since March – highlighting the need for prescriptive guidance to cut costs. Combining historical usage data with utility rate plans, the experience can offer personalized rate assistance. It shows customers exactly how they’re consuming energy, predicts total costs for the billing cycle and makes detailed rate suggestions for cutting monthly costs.  

Control – Take action. Make an impact.

With greater awareness of what is driving their energy bill, customers can take action to reduce their burdens – making minor adjustments to daily routines to impact their bills. 

Budget management is the typically the first step to gaining more control. In doing so, the user starts unlocking additional advice and alerts to keep costs on track. Energy budgeting tools build broader awareness of their weekly or monthly usage. By setting targets, customers receive alerts when their usage begins to trend beyond their budgets. This helps customers know when to proactively take steps to stay on track and stop unwelcome surprises when their bills arrive. Since March, Powerley’s utility partners have witnessed a 78% increase in customer engagement in energy budget tracking.

These same detailed HEM insights also give utilities’ customer service representatives (CSRs)—for the first time—a powerful tool for creating better customer experiences. When customers call or use the in-app chat, CSRs can provide personalized coaching, options and benchmarking to help customers reduce their bills. This could include helping them identify the devices in their homes that are using the most electricity, forecasting how much they could save by adjusting thermostats a few degrees, or suggesting methods to reduce their always-on electricity demands.

Relief – Right at The Moment it Matters Most

Increased customer awareness and engagement naturally lead to better remittance outcomes. As customers set new budgets or change behaviors, the energy management experience can automatically offer new rate programs or payment options. Bill assistance questionnaires can be integrated into the energy management experience, helping customers understand options for paying past or upcoming bills, or determine income eligibility for government relief.   

If customers do get off-track, the information attained from the HEM experience can help identify at-risk households much earlier than with existing propensity-to-pay models. This is particularly valuable as the effects of the COVID pandemic continue to destabilize household finances. Some households will self-identify via direct requests for assistance; others will surface via analysis of user-set budgets and consumption trends. Early identification allows for programmatic interventions that ultimately reduce the burden on customers and the non-collectible revenues for utilities. 

By augmenting existing relief and payment programs with greater intelligence, the utility can proactively prescribe the right remedy to break the Energy Burden Cycle. This single, engaging experience enables customers to see and control energy costs, shift to more advantageous rate plans, enroll in billing programs, and get assistance right at the moment it matters. 

Ultimately, these benefits will reach far beyond the current situation caused by COVID-19. With more empowered and engaged customers, utilities can continue to extend new programs for additional savings, greater sustainability and higher customer satisfaction. Eventually they can offer a unified energy experience on the platform that includes renewables, rate programs and advanced DR initiatives that reduce peak loads and overall energy consumption.

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