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 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.

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