dealing with customers’ inability to pay in tough economic times

Dealing with Customers’ Inability Dealing with Customers’ Inability to Pay in Tough Economic Timesto Pay in Tough Economic Times

The Memphis Light, Gas and Water The Memphis Light, Gas and Water PerspectivePerspective

Jerry R. Collins Jr., P.E.Jerry R. Collins Jr., P.E.President & CEOPresident & CEO

Who We AreWho We Are

• Memphis Light, Gas and Water Memphis Light, Gas and Water (MLGW) serves the City of Memphis (MLGW) serves the City of Memphis and all of Shelby County. and all of Shelby County.

• 429,000 residential, commercial and 429,000 residential, commercial and industrial customersindustrial customers

• Largest three-service utility in NationLargest three-service utility in Nation

Our customersOur customers

• Approximately 43 percent of Approximately 43 percent of customers are low income.customers are low income.

• The unemployment rate is The unemployment rate is approximately 8.9 percent.approximately 8.9 percent.

Customer Care PolicyCustomer Care Policy

Made changes in 2008 to address the need to Made changes in 2008 to address the need to increase flexibility when working with increase flexibility when working with customers facing extreme financial situations. customers facing extreme financial situations.

Changes include:Changes include:• The option of including the deposit amount on The option of including the deposit amount on

a customer’s first bill. Residential customers a customer’s first bill. Residential customers pay $125, but the deposit is based on credit pay $125, but the deposit is based on credit assessment.assessment.

• Not all customers are required to pay a Not all customers are required to pay a deposit.deposit.

Customer care policy Customer care policy changeschanges

• Customers requesting extensions only need to Customers requesting extensions only need to pay 25% of their balance rather than 50%. pay 25% of their balance rather than 50%.

• Balance of the bill is extended to eight days past Balance of the bill is extended to eight days past the due date of disconnect notice. the due date of disconnect notice.

• Balances less than $400 can be extended eight Balances less than $400 can be extended eight days without payment.days without payment.

• We now allow second payment arrangements. We now allow second payment arrangements. • For a second payment arrangement, a customer For a second payment arrangement, a customer

must pay 50% of the remaining balance and the must pay 50% of the remaining balance and the balance is extended until two days before the due balance is extended until two days before the due date on the next. date on the next.

Utility AssistanceUtility Assistance

• Community Service Agency (CSA)Community Service Agency (CSA)•Must meet income guidelinesMust meet income guidelines

•Each customer receives $500Each customer receives $500

Utility AssistanceUtility Assistance

– MIFA/Plus-1 Metropolitan Inter-Faith MIFA/Plus-1 Metropolitan Inter-Faith Association (MIFA)Association (MIFA)

– Customers add a $1 or more to their utility Customers add a $1 or more to their utility billbill

– Qualifications Qualifications • loss of income within the last 90 days loss of income within the last 90 days

• medical crisis medical crisis

• eligible once every 2 yearseligible once every 2 years

City of Memphis Utility City of Memphis Utility Assistance ProgramAssistance Program

• Eligibility:Eligibility:1.1. Must be 60 years of age or older and/or certified Must be 60 years of age or older and/or certified

medically as being totally (100%) disabled.medically as being totally (100%) disabled.2.2. Head of household.Head of household.3.3. Active utility account in applicant’s name or spouse’s Active utility account in applicant’s name or spouse’s

name. name. OROR1.1. Head of household or spouse on active military Head of household or spouse on active military

deployment.deployment.2.2. Active utility account in applicant’s name or spouse’s Active utility account in applicant’s name or spouse’s

name.name.3.3. Must have received cut-off notice.Must have received cut-off notice.

MLGW…Caring for MLGW…Caring for CustomersCustomers

Special Assistance ProgramsSpecial Assistance Programs

• Annual Moratorium on Cutoffs for Annual Moratorium on Cutoffs for NonpaymentNonpayment

• MLGW defers cutoffs for non-payment for MLGW defers cutoffs for non-payment for all residential customers between Dec. 15 all residential customers between Dec. 15 and Jan. 14 annually.and Jan. 14 annually.

MLGW Customer Special MLGW Customer Special Assistance ProgramsAssistance Programs

• Winter MoratoriumWinter Moratorium

• Prevents disconnection of services Prevents disconnection of services from December 1 through February from December 1 through February 28 for seniors (age 60 and above) 28 for seniors (age 60 and above) and/or those with disabilities.and/or those with disabilities.

Deferred Payment PlanDeferred Payment Plan

• If a customer cannot meet the Payment If a customer cannot meet the Payment Arrangement criteria, MLGW may offer the Arrangement criteria, MLGW may offer the Deferred Payment PlanDeferred Payment Plan

• Conditions that may require a Deferred Payment Conditions that may require a Deferred Payment PlanPlan– Customers with arrears created by a “charge in” from a Customers with arrears created by a “charge in” from a

previous addressprevious address– Customers who come out of the winter season Customers who come out of the winter season

(December, January, February and March) with unusually (December, January, February and March) with unusually high winter billshigh winter bills

– Winter Moratorium customers with large balances at the Winter Moratorium customers with large balances at the end of the program due to extreme heating costsend of the program due to extreme heating costs

On TrackOn Track

• A payment program designed to help A payment program designed to help customers with limited incomes to manage customers with limited incomes to manage debt and pay off their bills over a period of debt and pay off their bills over a period of timetime

• Focuses on education, financial management Focuses on education, financial management and social servicesand social services– Customers must have a steady, but limited incomeCustomers must have a steady, but limited income– Owe more than $600 on their utility billOwe more than $600 on their utility bill

• Average 300 customers a year.Average 300 customers a year.

Net Due Date ProgramNet Due Date Program

• For customers who receive income in For customers who receive income in the form of Social Security, Disability, the form of Social Security, Disability, government assistance or pension government assistance or pension once per month.once per month.

• Can change bill’s due date.Can change bill’s due date.

Helping Customers to Use Helping Customers to Use Energy WiselyEnergy Wisely

Max Impact Loan ProgramMax Impact Loan Program

• Home weatherization loan programHome weatherization loan program– 3 percent financing.3 percent financing.– Pay back on utility bill.Pay back on utility bill.– Up to 10 years to repay.Up to 10 years to repay.– Earn less than $35,000 a year.Earn less than $35,000 a year.– Can borrow up to $2,500.Can borrow up to $2,500.

Energy Smart MemphisEnergy Smart Memphis

• Energy education Energy education workshopsworkshops

• Participants take Participants take home home weatherization kit weatherization kit worth $50worth $50

Energy InformersEnergy Informers

• Interact with Interact with customers in our customers in our five community five community offices.offices.

• Hand out a variety Hand out a variety of brochures and of brochures and discuss various discuss various energy conservation energy conservation methods.methods.

Giving BackGiving Back• Fans and air Fans and air

conditioning conditioning window units to window units to seniors and needy seniors and needy families to help families to help them cope with them cope with high temperatures. high temperatures. MLGW purchased MLGW purchased 200 fans and 200 200 fans and 200 air conditioning air conditioning window units.window units.

Rental OrdinanceRental Ordinance

• Proposed by MLGW to focus on the Proposed by MLGW to focus on the most flagrant of problems found in most flagrant of problems found in rental housing.rental housing.

• Landlords have to rectify problems or Landlords have to rectify problems or could face environmental court.could face environmental court.

Rental Ordinance Rental Ordinance requirementsrequirements

– Windows must be properly glazed.Windows must be properly glazed.– Pipes and wire entries into the building Pipes and wire entries into the building

must be sealed properly from the must be sealed properly from the outside.outside.

– Attics must be insulated.Attics must be insulated.– Heating and cooling equipment (if the Heating and cooling equipment (if the

landlord provided it) must be working.landlord provided it) must be working.– Plumbing must be free of leaks.Plumbing must be free of leaks.

TVA/MLGW PilotTVA/MLGW Pilot

• Upgrades to 130 homes with Energy Upgrades to 130 homes with Energy Star-rated window units and Star-rated window units and additional weatherization.additional weatherization.

• Will measure customers’ usage Will measure customers’ usage during this cooling season and during this cooling season and compare to last year’s cooling compare to last year’s cooling season.season.

Closing RemarksClosing Remarks

Always do that which is in Always do that which is in the best interest of the the best interest of the customers as a whole.customers as a whole.