Accounts receivable are climbing for many electric and gas utilities across the country, and rising commodity prices and seasonal cold weather are not the only culprits. A weak economy marked by sub-prime mortgage woes, slow growth, and more layoffs is also contributing to utilities’ deteriorating collections performance.
Utilities with passive credit and collections policies, loose process discipline, and ineffective low-income-assistance programs are struggling. Even companies that are more assertive and effective in these areas are being challenged by today’s economic conditions.
This is why a well-structured, comprehensive credit and collections strategy is vital for weathering difficult economic times. The strategy should include many functions, not just Customer Service but also Regulatory Affairs, and even Distribution crews. It should address both able-to-pay and low-income customers, and cover a customer’s entire life cycle with a utility: from applying for service, to moving, to service disconnection. Ideally, the strategy should leverage utility personnel, external vendors or contractors, and other relevant outside organizations such as low-income-assistance or social services agencies.