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Larry Weis, Austin Energy General Manager Mission: Deliver clean, affordable, reliable energy and excellent customer service. Collections Overview Disconnection and Reconnection Process Special Council Committee on Austin Energy Meeting December 5, 2013 2 •Follow City Code Chapter15-9 and state laws regarding utility debt •Assist the customer in reducing outstanding balances by offering flexible payment arrangements •Offer the customer opportunities to successfully manage their utility account and prevent perpetual debt accumulation •Offer special provisions for CAP and low income customers •Minimize utility rate increases •Optimize support services funding Objectives 3 Collections Process Steps Overview •The collections process begins with the generation of the customer’s bill •The process is highly automated, events trigger each process step •The customer can stop the next event at any point in the process by either making payment in full or requesting a Payment Arrangement. 4 Definitions Payment Arrangement •A Payment Arrangement (PA) is a short term payment option for households that are having a temporary crisis; PAs provide several months to pay off overdue utility bills in equal installments. These installments are in addition to the regular monthly current charges. The City of Austin does not disconnect services of customers with approved payment arrangements and on-time payments. Payment Arrangement Success •Successful PAs occur when payments for each PA installment plus the current billed charges are received in full, on or before the due date for each applicable month. Payment Arrangement Default •PAs are in default when the full PA installment and current billed charges due are not paid by the due date. If default occurs the account will proceed through the collections process. Arrearage Management Program •Arrearage Management Programs are long-term financial assistance programs and provide relief for low-income customers who have significant past due amounts (arrears) on their utility bills. •Bill is not paid by due date •No response to delinquent payment reminder •No response to 24-hour notice •Customer does not request a payment arrangement 5 How Does a Disconnect Occur? •On average 14% of the total residential customers enter into the collections process each month 422, 27% 358, 23% 289, 18% 514, 32% August 2013 Customer Behavior – 24-Hour Notice 10,644 , 20% 2,242 , 4% 866 , 2% 39,390 , 74% August 2013 Customer Behavior - FTNs Paid account Set up Payment Arrangement Set up Payment Plan Took no action * There was no collection activity between August 2011 – May 2013. In July 2011 there were 147 total disconnects. 6 Residential Disconnections Residential Disconnections 2010 2011 - 2012 2013 Total CAP Total CAP July 2753 113 No Disconnects 447 31 August 655 23 No Disconnects 673 60 September 4112 126 No Disconnects 1710 182 •The current policy and guidelines work together to minimize the number of customers that reach the point of disconnection. •In September 2013 the percent of disconnected customers was 0.46%. •On November 26, 2013, Austin Energy implemented an Interim PA policy through May 2014 7 Payment Arrangement (PA) Regular Policy Suspension Period (Jun 2012 – Nov 2013) Interim (Dec 2013 – May 2014) Number of Monthly Installments [1] Up to 8 Up to12 Up to 24 Number of Payment Arrangements Allowed 1 3 4 Down Payment Required Yes Yes No Must bring Account Current for a New PA Yes No No Eligible If Service Is Disconnected No Yes Yes [1] Additional installments are available for customers in Low Income, Medically Vulnerable, or Life Support Programs through the City of Austin’s Customer Assistance Program per City Resolution 110121231-1231. 8 •In month of September, there were about 17,021 Payment Arrangements of which 4,993 had 3 PAs, about 1.3% of our total residential customers. Payment Arrangement (PA) Data Data for Multiple Payment Arrangements as of September 2013 Total # % of Total PAs % of Total Residential Accounts Total of 3 PAs: 4,993 29% 1.3% Number of accounts that have: 1st PA 2nd PA 3rd PA Completed Broken Active 57 1% .0003% Broken Broken Active 2918 17% .08% Broken Broken Completed 750 5% .02% Broken Broken Broken 1268 7% .03% •The longer the PA, the greater the potential for default 9 Broken Payment Arrangements 75.6% PA’s are Broken by the 6th Installment 68% PA’s are Broken by the 4th Installment 56% PA’s are Broken by the 3rd Installment 34% PA’s are Broken by the 2nd Installment 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Status of Residential PAs - Grouped by Start Date Life of Payment Arrangement program % Active # % Broken # % Complete # 10 Multiple Payment Arrangements •Customers with multiple broken payment arrangements can end up owing more than when they started Example Customer 1st PA, 8 installments. of $86.13 2nd PA, 24 installments of $40.34 3rd PA, 13 installments of $72.28 4th PA, 12 installments of $82.57 5th PA, 24 installments of $59.43 Note: each payment arrangement includes past debt plus an unpaid current bill amount  Questions? 11 Thank you! City of Austin - Austin Energy Customer Care Center 721 Barton Spring Rd. Austin, Texas 78704-1194 p. 512-494-9400