Segmenting the Low-Income Customer Population to Deliver Energy Assistance

Presentation to Entergy Low-Income Summit

Roger Colton

Fisher, Sheehan & Colton

Public Finance and General Economics

Belmont, MA

October 2000

How to Identify “Low-Income” Consumers

• There is no generic “low-income consumer.

• Rather than seeking to identify “low-income consumers,” need to identify particular low-income consumers.

• Decide upon what it is you’re after, and what low-income consumer can deliver that.

• Seek groups with those attributes

Seeking Particular Low-Income Consumers

Segment• Older consumers

• Section 8/public housing residents

• LIHEAP recipients

• TANF recipients

• EITC recipients

• Affordable housing residents

Attribute• Stable, homeowner.good payer

• External bill payment subsidy

• External bill payment subsidy

• External bill payment subsidy

• External bill payment subsidy

• Homeowner.

What to Offer Low-Income Consumers

Concept

• Flexibility

• Local

• Helpful

• Affordable

• Partnership

Operationalize• Payment plans, cash

payments• “Adjunct offices”• “Part of the Solution”

campaign• Incentive payments,

affordable rates, efficiency• Customer/company and

community/company

Identifying Low-Income Consumers: Partnerships

Sought-After Group

• Older customers

• Low-income homeowners

• Publicly subsidized

Partnership

• Elder Care, Medicare, faith-based organizations

• Affordable housing programs

• Community-based organizations

Helping Bring Resources To Bear on Problems

• BOSS/Chronicles

• Need to inventory resources

• Pay incentives to avail themselves of resources

• Capture resources for company.

• New Jersey & GPU (PA)

• What are the programs?

• One-time payment or ongoing discount

• Assignment of benefits

How to Pitch to Low-Income Community Organizations

• Affordability is but one aspect of low-income interests

• Minimize “search costs” (“we’ll do it for a whole bunch of folks at once”)

• Maximize expertise (“we’ll rely on you, if you rely on us”)

• Market power (“we’ll negotiate for you”)

• Resources: do you have the time and staff to do this?

Entergy: “Part of the Solution, Not Part of the Problem”

• Associate name with helping campaigns directed toward specific populations you’re seeking to attract.

• A little money is often a lot to these campaigns.

• Elder Care campaign• State Children Health

Insurance Program outreach

• Affordable housing• Information & referral

services• School lunches/WIC• EITC promotion

Ways to View Low-Income Consumer

• Are generally low load factor• Have public subsidies (which are even more

significant when viewed from simply a genco perspective, i.e., lower bill than total electric bill)

• Some (elders, homeowners) can be quite stable, long-term customers.

• Despite stereotype, poverty for any given family most often is short-lived.

For more information:

roger@fsconline.com