What are the best ways to communicate rate changes to utility customers?
Q:What are the best ways to communicate rate changes to utility customers?
A:With the cost of energy rising, it’s time to rethink your rate communication strategy so you can offer customers proactive communications before rate increases show up on their bills. Your customers want to understand how a rate change will affect four personal values:
- Their families, their businesses, and their own lives
- The environment
- Future generations
- Their communities
Communicate rate increases clearly and directly, and frame them as stories where your customers play leading roles. For example, in its March 18, 2022, Twitter post, Con Edison started its caption with “Weather, demand, and world events all effect [sic] energy costs.” The statement suggests that by paying higher rates, New Yorkers are being good world citizens.
We also recommend communicating rate changes by:
- Being proactive and building trust
- Keeping messages simple by avoiding jargon and confusing mathematical analyses
- Highlighting your commitment to keeping costs affordable and equitable
- Featuring bill assistance programs, including gift-of-energy programs
- Posting on social media channels
- Using market research to enhance your communication strategy
- Treating small and midsize business customers as a unique group
What are utilities including in their rate-change communications?
Their commitment to renewable energy
Until 2022, Nova Scotia Power went 10 years without submitting a general rate application. In 2012 NS Power created a platform for customers to ask questions about rate cases and rate increases.
In its Tomorrow’s Power marketing campaign, which you can find in E Source Energy AdVision, NS Power featured some of those customers and their questions (figure 1). Rather than focusing on the costs, NS Power focused its messaging on how it will deliver better and cleaner energy. And it continued to encourage customers to ask questions.
Figure 1: Direct mail postcard from NS Power
Today, NS Power has a web page for its 2022–2024 General Rate Application. Like its 2012 messaging, NS Power’s current messaging focuses on providing reliable electricity through cleaner energy sources:
Climate change is a real concern for all of us. The Federal and Provincial Governments are focused on reducing carbon emissions on an expedited basis to mitigate potential impacts. This includes the requirement to phase out coal-fired electricity and deliver 80 per cent renewable energy for customers by 2030.
We’re committed to achieving these goals, which means we need to transform how we make, deliver and store electricity in less than 10 years—to change an electrical system that took over 50 years to build.
Nova Scotia’s weather is changing too, bringing more intense storm events and increased wind speeds which affect reliability. Delivering reliable service is more important than ever because today’s technology is driving an increased demand for electricity. Our customers rely on electricity to live, work and thrive in a modern Nova Scotia. This means we need to strengthen and modernize our electrical system so that it can stand up to changing weather and meet the energy needs of our customers.
On its web page, NS Power links to its rate application and related resources. It also has an FAQ section that includes answers to questions like:
- How much are rates going up?
- Why do rates continue to increase?
- What supports are in place to assist customers?
Their commitment to affordable rates
Seattle City Light. The utility emphasizes affordability and renewable energy on its Residential Rates web page:
City Light rates are more affordable compared to many cities in the country because we’re a public, not-for-profit utility and we primarily rely on low-cost, renewable, carbon-free hydroelectricity. We focus on providing stable, predictable rates that allow us to deliver sustainable, reliable, and affordable service.
The web page includes information about what’s included in bill charges and defines “watt” and “kilowatt-hour” for customers. City Light’s rates page also includes visual elements:
- It features a table showing all its current residential rates.
- It has a chart, breaking down everything that’s covered in its rates such as power, delivery, taxes, and metering.
Fort Collins Utilities. On its rates web page, Fort Collins Utilities emphasizes that it works hard “to make sure [customers] enjoy some of the lowest rates in the Front Range.” The utility also gives customers an overview of the rate-change timeline, making it clear to customers when they can expect changes to their bills: “Typically, City Council approves rates in November and the new rates go into effect in January. February bills reflect the new costs.”
In addition to emphasizing the affordability of its rates, Fort Collins Utilities also clearly explains the difference in its rates year over year. It includes a comparison table on its rates page, showing the average single-family monthly bill for electric, water, wastewater, and stormwater in 2022 versus 2023 (figure 2). The utility goes further and links to more comparisons in how Fort Collins Utilities’ rates compare to those of other utility types in Colorado—How We Compare Residential Rates and How We Compare Commerical Rates.
Figure 2: Fort Collins Utilities average single-family monthly bill comparison
| Utility | 2022 | 2023 | $ change | % change |
|---|---|---|---|---|
| © E Source; adapted from Fort Collins Utilities (Fort Collins Utilities Rates). Note: WQA = winter quarter average. | ||||
| Electric (700 kilowatt-hours/month) | $80.01 | $84.01 | $4.00 | 5% |
| Water (10,000 gallons/month) | $49.03 | $50.99 | $1.96 | 4% |
| Wastewater (4,800 gallons/month WQA) | $34.25 | $35.62 | $1.37 | 4% |
| Stormwater (8,600 square foot lot, light runoff) | $21.74 | $22.40 | $0.65 | 3% |
SMUD. On its Rate Information page, SMUD first states that its committed to low rates and that its rate “are among the lowest in California, and on average are 45.5% lower than PG&E.” SMUD then directs customers to its How our rates compare page, where the utility shows how its residential rates compare to rates from seven California utilities and how its business rates compare to PG&E’s rates.
SMUD also directs customers to its 2022–2023 rate changes web page, where it explains what the exact rate increases will be, when these changes will go into effect, how they’ll affect monthly bills, and why rate changes are needed.
Information on who sets rates and what’s included in costs
Southern California Edison explains that it works with the California Public Utilities Commission to set rates in a process that’s open to the public. On its How Rates Are Set web page, Southern California Edison breaks down what’s covered in rates. For example, out of $1.00:
- $0.46 goes to generation costs
- $0.37 goes to distribution costs
- $0.08 goes to transmission costs
- $0.05 goes to wildfire costs
- $0.04 goes to public purpose programs
Explanations behind rate changes
Xcel Energy features a video on its Rate Cases web page to explain to customers why rates increase and who’s involved in approving rate changes (figure 3).
Figure 3: Xcel Energy rate-case video
How are utilities communicating about rate changes on social media?
Most utility posts about rate changes include information about when utilities submit a rate case and where customers can go for more information about the process and expected timeline. We’re also seeing utilities post about financial assistance in relation to rate increase. Figure 4 shows examples of recent utility social media posts about rate changes.
Figure 4: Utility social media posts about rate changes
Any time you post about rates, you’ll experience unhappy customer comments. Our report Addressing negativity on social media gives tips and examples on how to respond to these comments and alleviate customer concerns. This report is available to members of the E Source Corporate Communications Service.
More resources on rate communications
During the public webinar Reimagining electricity pricing to meet beneficial-electrification and carbon-reduction goals: Now’s the time for big changes, two national experts have a lively conversation around electricity pricing, including how to design pricing options that customers actually understand and want.
Answering questions about high bills looks at ways you can help customers struggling with high energy bills.