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 lowincome 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