FortisBC Inc. (FortisBC) Application for a Certificate of Public ...

FIGURE 1: Interest in billing options
Customer-selected due date was the clear favorite among billing options.
Potential Cash-Flow Implications and Benefits to Utilities
The potential cash-flow implications of allowing customers to choose when they pay their bill
may be obvious: No business wants all of its receivables to come in the door on the same
day or even the same week—they want a nice, even cash flow throughout the billing period.
However, another school of thought is that customer-selected due-date programs may help
customers pay on time and reduce write-offs, which serves to increase cash flow. But the
true impact on arrearage reduction seems to be small.
One of our best sources on credit issues and payment-troubled customers is Roger Colton
from the law and economics consulting firm Fisher Sheehan & Colton. His report
Understanding Why Customers Don’t Pay: The Need for Flexible Collection Practices states:
Roughly half (47%) of all payment troubled customers experienced some “unusual condition”
that prevented the timely payment of their utility bill. . . . the presence of a conflict between the
billing date and the due date (5%).
This didn’t seem to be a sizeable class, but, Colton explains, “It’s a small but politically
popular subset of customers who benefit from pick-a-date programs. They tend to be seniors
on fixed incomes who work really hard at budgeting.” Given the small size of this group,
however, there doesn’t seem to be a lot of arrearage reduction from these programs.
Rather than offer the program to reduce arrears, several utilities offer it for the customer
satisfaction benefits. Renee Castillo, senior director of Customer Services at SRP, explains
the utility’s custom due-date program:
SRP does experience fairly spiky billing runs and somewhat higher call volume with the billing
spikes, but we plan for it and tolerate that challenge for the sake of the customer satisfaction
benefit. Customer satisfaction with choosing due dates is very high, and we’ve offered the option
for many years. Customers don’t have to be on autopay or paperless billing to enroll.
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Appendix BCUC IR1 22.1