Utility Collections in a COVID-19 World Present Public Relations Challenges

At the start of the pandemic, many utilities did not shut off customers with overdue bills. Some did this voluntarily, others because of state mandates. Now utilities, with up to 40 percent of customers behind on payments, must consider collection activities.

More consumers are behind on housing, car, credit card and other bills, with enhanced unemployment benefits ended and service shutoff bans expiring, creating a challenge for utilities.

Utilities risk reputational damage by ordering shutoffs during the fall, when customers need to heat homes and use lights more often. No one wants to be the Big Bad Wolf.

Lower revenue because of the business slowdown and overdue bills have depressed balance sheets. Bad debt could impact credit ratings, complicating funding for plant and infrastructure upgrades. Rate relief—effectively spreading the bad debit across the rate-paying base—is difficult to imagine in a slumping economy.

More aggressive collections won’t solve this crisis. Coordination between customer service, communications and government affairs is essential. Utilities must embrace flexible programs backed by effective communications, combined with fundamental changes to credit policies. They must strengthen collaborations with crisis-assistance agencies, houses of worship and schools, while pivoting to easier-to-use digital portals to handle customer inquiries.

Many of today’s late-paying customers have never been behind on utility bills and are not aware of assistance programs or payment plans. The potential flood of shutoff notices could boomerang into call center volume increases and complaints to regulators.

Six rules can help utilities navigate this complex situation:

  1. Claim ownership. Utilities were there for customers when this crisis hit and have a right to reference the support provided.
  2. Demonstrate compassion. Every customer is feeling COVID-19 pains. Loved ones have been sick. Jobs have disappeared. Utility usage is up with people working and learning from home. Show you understand and care.
  3. Rely on existing resources. Fully explain payment plans, energy assistance and local organizations that help with financial crises.
  4. Build bridges. Local mayors’ offices, houses of worship, chambers of commerce and schools should be part of your outreach strategy. Make sure the places where customers might turn understand programs to help avoid service interruptions.
  5. Get creative and make it easy. Cut red tape. Build an online portal to reduce application backlogs. Waive rules and avoid policies that can seem bureaucratic and heartless.
  6. Demonstrate compassion (again). It is the right thing to do for your customers and your reputation. Empathy is crucial during these times.

Utilities have shouldered significant burdens during COVID-19. Now they must communicate with customers, be transparent with regulators, and collaborate with assistance organizations. Otherwise, for utilities’ reputations, it’s lights out.

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