Surging vulnerability puts utilities under pressure

The maelstrom created by the coronavirus pandemic poses existential questions for utilities around the concept of consumer vulnerability. Jane Gray discusses the emerging concerns of sector leaders about the ability to support vulnerable customers, and the impact on frontline staff.

These are grave times. The coronavirus pandemic is pummelling communities and economies around the world, forcing around a quarter of the world’s population into lockdown conditions and shunting all too many companies – large and small – towards the brink.

In such an environment, our conventional understanding of consumer vulnerability is becoming rapidly irrelevant. We are all vulnerable now, whether to the disease itself, the financial stress it is wreaking, or to the physical and mental detriment that isolation and social distancing will bring for very many individuals.

And all the while, utility companies, many of whom have sophisticated support mechanisms, including partnerships with trusted third parties, are under mounting pressure to maintain core operations with reduced workforces operating under unfamiliar conditions, meaning capacity to deliver support to those in need is stretched.

Understandably, the focus on vulnerable customer support during the early days of the crisis has centred on protecting continuity of supply to isolating individuals and households. Infrastructure owners have taken action to protect operational resilience. And energy retailers and water companies alike have issued assurances that customers will not be cut off if they fall behind with their bills.

This wave of first response has generally been strong. But as weeks and months of extraordinary measures to contain the spread of coronavirus stretch ahead, leaders in the sector have shared a range of serious concerns around their ability to support vulnerable customers, and the impact that delivering support will have on front line staff. Here are a few of the considerations in play:

Bills and bad debt

Energy retailers are increasingly concerned at the impact that a surge in bad debt could have on individual organisations, and the sector as a whole. Many retailers came into this crisis with fragile cash flow and liquidity. They cannot bankroll a swathe of financially stressed customers for an extended period – yet figures showing that nearly one million application have been made in the past two weeks alone for access to universal credit suggest they will come under pressure to do so. A spate of supplier crash outs in the sector will only increase the risk of vulnerable consumers falling between the cracks in industry support mechanisms and third party sign-posting – especially given doubts about the resilience of the supplier of last resort mechanism in the current climate.

This worry is behind a gathering movement to lobby government for the provision of direct support to struggling customers, specifically for the payment of utility bills – especially energy.

Limited vulnerability visibility

Utilities have taken huge strides in recent years to encourage consumers who might find themselves particularly vulnerable in the event of disrupted supply, to join the priority service register (PSRs) – a list of consumers to be targeted for priority reconnection and special care during planned and unplanned service interruptions. As of September 2019, there were almost 7 million electricity customers registered for priority services and over 5.5million for gas. However, one expert source has told Utility Week that the “blunt” categories used by the PSR are unlikely to give utilities significant visibility in the level of financial hardship being experienced by consumers at any one time.

Furthermore, PSR information is siloed and there is limited ability for energy networks, energy retailers and water companies to share information on PSR lists which might significantly help targeted care to those most in need during the coronavirus crisis.

It is unfortunate that a scheme to facilitate PSR data sharing across the energy and water sectors, which was due to “go live” this month, was postponed by the UK Regulators Network (UKRN) in late January. However, Utility Week understands that there are active industry discussions underway for utilities to gain access to government consumer vulnerability data which might well ease frustrations in this area.

Strains on staff capacity and wellbeing

A key concern for utilities looking to fulfil a social purpose in supporting vulnerable consumers through this testing period will be to avoid undue risks to employee safety and wellbeing in the process.

This represents no small challenge. Under normal circumstances, Utility Week frequently picks up anecdotal accounts of field workers performing acts of great compassion for customers in difficult circumstances. They will continue to be motivated to do so, but must ensure that they do not put themselves or, inadvertently, customers at risks through acts of kindness of intervention. Employers need to be very clear about policies for interacting with customers on the front line and ensure staff understand why these policies exist.

Meanwhile, employees responsible for handling customer enquires are experiencing unprecedented levels of demand for their support from customers who are increasingly likely to be suffering some level of distress, whether through simple loneliness or frustration with social distancing and isolation, illness or financial difficulty.

Utilities leaders need to ensure that despite the high volume of inbound contacts being made and the need to monitor productivity across newly distributed customer service functions, that they also make staff feel able to give each customer the time needed to resolve their issues effectively and sensitively.

Furthermore, leaders should be alert to the emotional and mental health strain that contact centre workers are likely to come under during this period and provide appropriate training and support.

Utility Week explored these issues and more in our weekly webinar today (3 April) with our panelists Matthew Vickers, chief executive of the Energy Ombudsman, Matt Cole, chair of the Fuel Bank Foundation and Andy White, senior policy manager at CCW.

You can listen back to the recording here.