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Increasing Consumer Choice Is A Win-Win For Utilities And Their Customers

Consumers are convinced that they have the freedom to purchase anything they want — that is, if the product or service is available and they can afford it.

Indeed, the concepts of consumer “choice” or “empowerment” have been quite popular in the media for some time.

However, when it comes to home utility service, it’s the lack of choice that gets most of the attention. The media and advocacy groups have largely positioned utility companies as denying customers choice: the energy supply and delivery, which determine the price, are set by the utility company and the only “choice” is paying for service — or not.

This picture is of course inaccurate, as utility companies and even the federal government have stepped in to enable diversified utility offerings to consumers over the last several decades. Thanks to deregulation in the 1990s, consumers in states with restructured energy markets have the freedom to choose their own form of energy supply and their own energy supplier.

So apart from de-regulation, what else are today’s utility companies doing to give more power to consumers? In short: a lot. Let’s have a look at a few.

Smart meters and data

Going green has gone mainstream, as consumers demand stronger environmental awareness and social responsibility from companies with whom they do business — their local utility companies included.

While utility companies continue to make investments in and roll out alternative energy options for their customers, another technology has entered the scene to increase efficiency, reduce waste, and give more power to consumers: smart meters.

Smart meters enable two-way communication between the meter and the energy company. However, the data collected is not exclusively for use by the energy company: consumers can view their energy usage in near real-time, via their online account or a mobile app.

With access to such data and insights, utility customers can monitor and adjust their energy usage accordingly on a regular basis.

For example, they can decide to turn their HVAC, home appliances, and equipment on and off — even for a few hours or a day — without incurring fees, ultimately reducing their utility bills.

In the process, the utility benefits by reducing waste — and customer complaints.

A customer care makeover

With more visibility and control over their energy usage, customers feel empowered AND more satisfied.

Indeed, they may even contact customer care less frequently; this would benefit utilities significantly from a resource perspective.

However, customer care still needs to be present, and offering several, flexible communications options is another way to give consumers more choice.

Today’s more innovative utility companies offer not only the traditional call center option but also web-based messaging (via both a form and a chatbot) and communications with customer care via the utility’s mobile app. This is also useful for customers when reporting a power outage, as a few taps and a message is sent off without any hassle.

Prepay and payment options

Making sure that customers pay their bills is important — but giving people additional options to pay their bills is the ultimate win-win for everyone.

The traditional post-pay utility payment system is opaque because consumers pay for service incurred the previous month. Surprises at the end of the month are common, as consumers are shocked at the amount of a bill based on uncertain or unanticipated energy use.

Then paying the bill is another matter. Bills are usually paid with a paper check mailed to the utility or via electronic bill pay. The latter option, available via the consumer’s bank or the utility itself for close to two decades, certainly injects some convenience into the payment process. However, it still proves problematic: because the bill is not identical month to month, fewer utility customers set up automatic payments so as to “set it and forget it” as they can with other bills. The bill fluctuation requires more attention. As such, even if a consumer chooses electronic billing and payments, a bill can easily be missed, incurring late fees or worse — the shutting-off of service.

However, the rise of prepay payment options has been changing the game. With prepay agreements in place, customers make deposits and keep funds in reserve as part of a running balance. Rather than pay the bill once per month, funds in the account are used to pay for service as usage accumulates. Automatic replenishment options are also available when funds are low so that customers can set it and forget it.

Furthermore, the utility gets paid faster, with less friction, and eliminates late fees. This puts more money in consumers’ pockets and enables utilities to focus on streamlining other parts of the business, especially as they prepare for post-COVID.

No surprises, greater transparency, and more trust between the customer and the utility: prepaid gives consumers the ultimate in flexible payment options and control over their budget. And the utility gets paid promptly in the process.

Debt management

People generally want to be able to pay their bills on time, but sometimes they need help.

Utilities that offer flexible debt management options are yet another form of consumer empowerment that is a win-win for both sides.

As a feature of prepaid payment options, unpaid balances from a post-pay plan can be placed in a debt assistance feature that allows the customer to pay it off over time. A portion of future payments is applied to the debt to pay it down.

For example, a customer who owes $500 in unpaid bills to the utility can move this balance to a debt recovery program. Future utility payments will be split: 25% will go to servicing the debt and 75% goes to the prepay balance.

To make it more attractive, there is no deadline and no interest applied to the debt. As such, the debt acts as a $500 interest free-loan from the utility that can be paid off over a much longer period of time and in a consistent and automated manner.

With debt management plans in place, the utility lowers its accounts receivable, the consumer doesn’t have service turned off, and everyone benefits.


Figuring out what consumers want and how to deliver it is tough for any business. While consumers want choice, companies must deliver on that choice while remaining profitable or budget neutral.

Flexible payment options remove friction and save money for both parties. Consider partnering with a company like Exceleron to provide your customers with this choice — and power.