Keeping up with utility bills is an uphill battle for many low-income customers. On top of being financially challenged, these customers often live in poorly insulated homes. In Flint, Michigan, where the average annual per-capita income is less than $20,000, frigid winter temperatures can send customers’ utility bills soaring.
To serve economically challenged customers in its service territory—which includes Flint—Michigan-based Consumers Energy partnered with design-thinking firm IDEO and utility assistance provider The Heat and Warmth Fund (THAW) to create an innovative pilot billing program, called Clear Control, in late 2013. The goal of the Clear Control pilot program was to help low-income customers pay their utility bills by helping them better understand the relationship between their energy consumption and their energy costs.
To accomplish this goal with a customer-centric perspective, IDEO performed interviews and observational research in customers’ homes. Andrew Burroughs, partner at IDEO, described the process: “We sat and talked with customers about the issues they’re facing, how they cope, the resources they lean on for help, and what they like and dislike about their utility service. We wanted to get an in-depth understanding of what their lives were like and how they would like to interact with their utility.”
As a result of this research, Consumers Energy and its partners designed the pilot program with three customer-focused changes to the traditional utility experience:
- Shorter billing periods that encourage customers to make smaller, more-frequent payments. The pilot program was structured so that participants received two bills per month and had 14 days to pay each bill. “These customers aren’t in a position to do a lot of planning in advance with their finances. They aren’t looking a month ahead; they’re often looking only a week ahead or even just the next few days,” Burroughs said. Putting customers’ bills into smaller amounts helped them match the timing of the availability of funds with their ability to pay.
- Daily updates on consumption and bill amounts. Participants received daily text messages that detailed their household energy-usage costs to keep energy consumption top of mind. For three consecutive days before a bill due date, participants received a bill due notification via text message and email.
- Resources to reduce energy consumption and, ultimately, energy costs. The utility offered participants an in-home audit with personalized recommendations for low-cost, high-impact changes to reduce energy bills.
Lower energy consumption and reduced costs, along with smaller, more-frequent payments, helped participating customers pay more bills on time. The utility simultaneously benefited by avoiding arrearages, late-payment fees, and shutoffs. Lessons learned from Clear Control will be incorporated into Consumers’s overall energy assistance program design and development moving forward. The pilot program’s promising results point to proof that utilities can partner with their customers to end the constant uphill struggle to pay unwieldy energy bills.