New Research Provides Considerations in Engaging Low-Income Utility Customers

November 9 – 2018 The Smart Energy Consumer Collaborative (SECC) recently conducted research assessing low-income consumers’ priorities for home energy use and their interests in programs and services offered by electricity providers. The study was focused on low-income populations—who often have a considerably higher-than-average energy burden—because they are, “arguably best positioned to benefit from the money-saving potential of new energy-saving programs, services and technologies.”

Of the collected survey data (5,000 total respondents), 1,337 of those were low-income consumers (defined as having annual incomes under $25,000). 2,119 were categorized as low-to-middle income, or having an annual income above $25,000 but below $50,000.

The data provided some insight into the reasons consumers have for saving energy at home, their key demographic features and their preferred channels for communications with their electricity providers. Utility companies often face the challenge of reaching and engaging low-income utility customers effectively, and this data will allow them to have insight into developing solutions to those issues.

The study resulted in three key considerations, provided by the SECC, for customer outreach and program design--details of the considerations from the report are included:

1. Leverage opportunities to streamline program enrollment and cost effectiveness

Streamlining program enrollment can lower administrative costs and enable programs to reach more lower-income consumers.

Adopting a more holistic approach to supporting lower-income consumers by creating dual fuel (or fuel-blind) programs, which are coordinated or jointly administered in territories with separate gas and electricity providers, can benefit consumers. The overall goal of these strategies is to create a one-stop shop to minimize program delivery costs while maximizing the potential for energy savings.

Electricity providers may find opportunities for engagement by reexamining their existing programs that are directed toward single-family homeowners.

2. Utilize social media, but don't neglect well-established community networks

Low-income consumers value access to high-speed internet services and are avid users of social media, especially Facebook and YouTube. Furthermore, a majority of lower-income consumers are living in single-person households and are over the age of 55.

In addition to social media, there may be an opportunity to further engage with these consumers by exploring and developing collaborations and partnerships with internet service providers since most lower-income consumers consider both energy and internet access as "must haves."

Since many lower-income consumers don't see their electricity providers as trusted partners, there may also be opportunities for partnerships with various community-based organizations, such as community centers, neighborhood organizations and churches.

3. Find ways to address the "gap" in low-income assistance programs

There is never enough assistance to meet the need for those eligible to receive it — as only 20% of eligible consumers receive any assistance from weatherization and energy efficiency programs. Thus, a key to addressing this gap is to create a larger pool of available funding.

For states that lack state-collected or utility-collected funding, state officials or utility leadership may wish to create a supplemental program. These "fuel funds" are a tried-and-true way for communities to share resources and for electricity providers to invest in these customers.

The eligibility rules for these supplemental fuel funds can be set independently from the rules of the federally-funded programs to better meet the needs of consumers living in specific cities or regions of the state.
The Federal Poverty Guidelines can be relaxed to include more people living "just above" the poverty line.

Low-income utility customers can be a difficult-to-reach demographic for utility companies. Through gaining an understanding of this population’s motivations and needs, providers can design communication methods and other programs that will more effectively engage these customers. The utility company can then provide these customers with the help they need, and form a valuable relationship with them in the process—influencing them to view their utility company as a trusted provider.

Source: Durand, P. Three Ways Utilities Can Better Engage Low-Income Customers. 2018