Thought Leadership

Utilities Offer Stability During the COVID-19 Pandemic, but Risks Remain

April 29, 2020
Author: K.C. Boyce
Utilities Offer Stability During the COVID-19 Pandemic, but Risks Remain

The utility industry was quick to respond as the COVID-19 pandemic took hold in the US. Utilities rapidly suspended disconnects and began aggressively reaching out to customers to help them manage their energy use during these trying times. My colleague Chris Oberle recently wrote about some of the actions that utilities around the country are taking to support the communities they serve.

These communication and actions aren’t going unnoticed. Data collected through April 20 show that nearly one in five customers nationally has heard about how his or her utility is supporting the community during the pandemic by doing things such as suspending shutoffs or offering payment plans for those financially impacted. What’s more, customers who know what their utility is doing to help during the pandemic report 10% higher levels of trust in and 6% higher satisfaction with their utility than those who don’t.

Additionally, while customers overall think their utility is responding responsibly to COVID-19 (evidenced by a 7.20 score on a 0–10 agreement scale), those who know specifically what their utility is doing give ratings nearly one point higher. We also see a two-point range between the highest- and lowest-scoring utilities on pandemic responses, indicating an opportunity for some utilities to more aggressively lean into being a source of stability for their customers.

As an increasing percentage of the population is being asked—or required—to stay at home, residential energy use has increased. Recent data from Uplight found up to 30% increases in residential energy use in one utility territory. While our data don’t indicate quite as dramatic of an increase, customers are reporting average bill amounts roughly 10% higher than they did in Q1. The average bill in Q2 is knocking on the door of $200 despite milder spring weather, reducing the need for customers to run HVAC in much of the country.

At the same time as residential customers are using more energy, COVID-19 has caused a staggering number of unemployment claims nationwide. In the Midwest, 9% of utility customers don’t currently have the means to pay their energy bill, rising to 12% in the South. As might be expected, low-income customers are the most likely to be unable to pay their bill right now—one in five can’t. But, worryingly, even 5% of customers with a household income of over $100,000 a year don’t currently have the means to pay their bills.

This, coupled with the shutoff moratoriums many utilities currently have in place, creates a significant risk for utilities. Effective messaging around how customers can save energy and enroll in energy-efficiency programs is now critical to reducing potential financial losses for both utilities and their customers. The good news is that 19% of customers nationwide recall utility messaging on how they can lower their energy consumption; but utilities can’t take their foot off the gas on consumption management communication.

Additionally, utilities will need to be very measured in how they transition from shutoff moratoriums to more normal operations to maintain the customer goodwill they’ve built during the crisis. Many of our clients are working on making additional payment plans available or providing direct financial assistance to customers. Some regulators are also beginning to consider whether write-offs can be spread across a utility’s customer base.

While the data in this post are preliminary, Escalent will be releasing a special report, Utility Response to the COVID-19 Pandemic, in July exploring the impact of the utility industry’s pandemic response on brand perceptions and the overall customer experience. We will highlight individual utility performance and summarize best practices to give utilities an effective road map for preparing for, reacting to and addressing any potential crises in the future. In the meantime, please contact us if we can help your utility better address the opportunities and risks that the pandemic presents to the industry.

Click below to learn more about Utility Response to the COVID-19 Pandemic.

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K.C. Boyce
K.C. Boyce
Vice President, Automotive & Mobility and Energy

K.C. Boyce is a vice president in Escalent’s Automotive & Mobility and Energy practices. He works with energy providers and automakers to craft compelling products and programs that accelerate the energy transition. Throughout his career, K.C. has worked across industries and sectors to develop innovative solutions to complex problems and translate subject matter expertise into actionable insight. He is the co-host of the weekly Energy Matters radio show and a nationally known speaker on topics such as electric vehicles and solar. Before joining Escalent, K.C. was senior vice president at Chartwell, where he led industry and consumer research, conference production and marketing. He also served as the Smart Energy Consumer Collaborative’s assistant director, leading its consumer research program. K.C. holds an MBA from Georgia State’s Robinson College of Business and a bachelor’s degree in political science from Colorado College.