Maintaining Utility Customer Engagement and Brand Trust While Navigating Rate Hikes

The headlines never stop:

• “Basic service rate up 62% over last winter.”
• “State regulators approve 12% rate hike to start this summer.”
• “Inflation is falling, but not your electricity bill.”

Who could blame utility customers for wondering just what the heck is going on with their bills? In 2022 and 2023, some unfortunate households saw their bills double, and many customers for the first time are trying to understand the equations behind “total amount due.” I’ve had to explain to several friends and family members that no, you don’t have natural gas in your home, but your electricity is produced by burning natural gas so, yes, you kind of do have a natural gas bill.

Timing is everything, and utilities have had the worst timing lately. Early on, COVID-19 bumped up a lot of energy utility bills as customers in lockdown increased their residential energy use; at the same time, many customers began accumulating arrears as disconnection moratoria stayed in effect and extended unemployment caused financial uncertainty despite enhanced government assistance programs.

Toss in a handful of global natural gas supply issues, add a pinch of summer and winter storms, simmer with a bouquet garni of persistent inflation, and don’t forget to mix in the infrastructure enhancements and green energy upgrades that are coming due (the latter of which are often erroneously blamed for higher bills). You’ve got yourself a perfect recipe for furious customers when they read about their utility’s latest rate hike.

So, what’s a utility to do?

You’ve got a rate increase to announce, whether it’s to cover higher fuel costs or restoration efforts, improve existing infrastructure or customer-facing systems, or build new eco-friendly generation sources. How do you maintain, or even improve, customer engagement amid ongoing rate increases?

There are evergreen recommendations, of course, but wouldn’t it be nice to develop messages that are relevant to your customers?

That’s what we thought, so we’re producing a customized, utility-specific, rates and economic-centric report, Utility Rate CX Navigator, that looks at the impact of inflation on residential customers and explores how various communication strategies, program offerings and brand activities can shape residential customer perceptions before, during and after rate increases. The content is based on current quarterly and trailing 12-month data from our Cogent Syndicated Utility Trusted Brand & Customer Engagement™: Residential (UTBCE) study as well as relevant external sources. Featuring national perspectives as well as customized insights and data from individual utilities, the 60+ page report is rich with insights unique to each purchasing utility and is designed to maintain or improve customer satisfaction and trust as utility rates continue to rise along with prices for other consumer goods and services.

For example, we found that customers are more likely to support—or at least be OK with—a slight rate increase if their utility invests in programs that matter to them. Nationally, 18% of customers say they would be OK with a 10% rate hike if some of the money went toward helping low-income families. For one combination investor-owned utility in the Midwest, however, that number rises to 29%—meaning rate case communication for that company should highlight the utility’s efforts to match disadvantaged households with utility programs and other available assistance.

Likewise, 6% of customers nationally say a 10% rate hike would be OK if it helped support EV charging. For one western electric municipal utility, that number is 21%, meaning the company should focus on its EV programs and charging expansion efforts in rate case communication.

One rule holds true for all utilities: Essential to effective rate communication is detailed information on how customers can manage increases. Utility Rate CX Navigator can help you identify savings and energy-control programs and services that correlate with higher customer value perceptions.

We’ve designed Utility Rate CX Navigator to be an on-demand, dynamic deliverable that analyzes timely, utility-specific data to deliver actionable insights that will help utilities navigate the challenges of rate increases. It can be purchased anytime during the year so utilities can receive insights using the most up-to-date data from our quarterly residential fielding.

For more information on the Utility Rate CX Navigator report or to see if there are other ways your utility can leverage our UTBCE residential and business studies, send us a note or click the button below.

About Utility Trusted Brand & Customer Engagement™: Residential

Each year, Escalent conducts surveys among 75,000+ residential electric, natural gas and combination utility customers of the 142 largest US utility companies (based on residential customer counts). The sample design uses a combination of quotas and weighting based on US census data to ensure a demographically balanced sample of each evaluated utility’s customers based on age, gender, income, race and ethnicity. Utilities within the same region and of the same type (e.g., electric-only providers) are given equal weight to balance the influence of each utility’s customers on survey results. Responses are collected continuously throughout the full year, providing seasonal perspectives.

For more information on the full report, click the button below.