Effectively communicating rate increases to utility customers

To communicate this well, we recommend two fundamental shifts at utilities:

• Think more holistically at the organization level. Take a unified and orchestrated approach to messaging on this topic, rather than siloed communication organized by utility program.
• Good communication about rising rates needs to be more nuanced and seen from the customer point of view.

5 essential components of good rate increase messaging

ICF has developed a playbook for good communication around rate increases that can be customized for each utility’s situation.

Start with a partnership mindset. If higher bills are inevitable, customers want to see that, at the minimum, there are ways the utility can help them.

1. Lead with empathy: Acknowledge that rate increases can make it hard to manage personal and family budgets. Minimize feeling corporate and cold through empathetic language and tone.
2. Minimize surprise: Describe what is happening and help your customers plan their finances well in advance of getting their first higher bill. Be as specific as you can in identifying the potential financial impact and timing.
3. Explain the “why”: Help customers understand why there’s a need for a rate increase. Identify what’s not in the utility’s control.
4. Describe what the utility is doing: Customer focus groups often indicate they want to know how the utility is contributing to a solution. Before you tell customers how they can be saving energy, they want the utility to be accountable, too. Describe what the utility is doing to manage costs and keep rates as low as possible. Share information about payment assistance and bill management programs. And consider taking new action to demonstrate how you are rising to the occasion. For example, some utilities are waiving bill late fees or pausing disconnects.
5. Promote what customers can do: Reinvigorate communications around the programs and services that help customers save money and energy, such as energy efficiency programs, managed payment plans, and time-of-day rates. But be cautious about promoting programs that require customers to invest money upfront to achieve savings.

All your rate communications and resources should lead customers to a centralized web page that unifies all this information. And customer call center agents should be trained well on how to handle incoming customer complaints and inquiries.

A new structure: Take a unified approach to customer engagement

While getting the communication right is important, it’s essential that it’s executed uniformly across the organization. Every team or line of business should see everything it does through the lens of a customer experiencing a rate increase.

Many utilities have a marketing and communication structure that is siloed—often designed to deliver on regulatory goals and specific budgets—but rarely unified at the corporate level and executed with a singular vision. Customers don’t know or care how the utility is structured internally. They simply look to the utility to get the information they need in one place.

In the time of a rate increase, we recommend that a communications / marketing  / customer leader (or a small group of leaders) should have oversight of everything going to customers. The intent is to ensure the tone is right consistently and that the utility is maximizing the opportunity to share multiple pieces of useful information.

For example, utilities should be able to share information in one communication about payment assistance programs along with energy efficiency programs or balanced billing plans. That often doesn’t happen because those programs sometimes operate under different leaders, with different budgets and regulatory mandates.

We also encourage utilities to take a holistic and more engaged communications approach, which includes the following:

Fill the information vacuum: We have seen more advocacy groups getting active in their anti-utility messaging around rate increases. Now is not the time for the utility to be quiet. Share your perspective before others do. Give customers everything they need, from resources to better manage costs, to explanations of why things are changing.

Adopt a dialogue mindset: Instead of just sending good communication materials, consider engaging in two-way dialogue with customers. One reason they post angry messages on social media is because they have nowhere else to be heard. Customers feel they have no control.

Consider setting up town hall meetings or online webinars to have two-way conversations. Engage community and religious groups as well, to partner with you in helping the community.

Communicate with simplicity and transparency: Keep it simple. Yes, rate structures are complex but do your best to minimize industry jargon and promote understanding.

Utility leaders can get caught up managing the very real and complex issues of energy generation, distribution, rate management, regulatory compliance, and delivering on investor expectations. But when it comes to rate increases, resist thinking about this only as an operational transaction. Think of your customer relationships as a partnership.

Pause and think of the average person in your community trying to make ends meet. During times of significant rate increases, show them what the utility is doing to help and then guide customers through what could be a challenging time.