RESEARCH IN PROGRESS
INTERIM FINDINGS FROM SELECTED PROJECTS NOT YET COMPLETED
“Best Practices in Customer
Payment Assistance Programs”
(Foundation project #4004)
Susan Turnquist, Water Research Foundation project manager
A new Foundation study will assist utilities
in using a quality management approach
when creating and implementing a
customer payment assistance program.
In the current economic downturn, many
utilities have struggled with higher rates
of customer nonpayment. In an August
2009 Webcast, 63 percent of 49 utilities
responding to the online poll said that
customer nonpayment is a growing
problem. Most utilities have policies
and practices to manage the problem of
residential customer nonpayment. Many,
perhaps most of these, are ad hoc policies
and practices, adapted over time, designed
to meet the single objective of recovering
payment. They may not be integrated with
other business processes and may not be
easily adapted to conditions of higher rates
Project #4004, soon to be published,
offers a business process to improve the
design and performance of customer
payment assistance programs (CPAP).
Using a Quality Management approach, a
utility’s CPAP can contribute directly to
other business objectives in areas such as
customer loyalty, corporate image, and
public health. These, in turn, contribute to
the bottom line and community support.
Project #4004 uses the Plan-Do-Check-Act
business process framework as a multi-objective, whole-cycle, and systematic tool
for developing a customized CPAP. In this
process framework, utility staff will
define the objectives of a customer 1.
payment assistance program,
develop several strategies and 2.
associated best practices—the core
deploy the processes and measure 3.
performance of the program, and
implement continuous improvement 4.
practices (see Figure 1).
The project also provides substantial
material to help utilities review and adapt
support processes such as legal issues,
personnel training, information technology,
and communication strategies for “typical”
customers as well as vulnerable and hard
to reach populations.
In reviewing existing practices in customer
payment assistance, the researchers found
that many utilities have used a somewhat
ad hoc approach. Many characterize
nonpaying customers as simply “cannot
pay” and “will not pay.” The business
process framework provided in the report
draws upon existing research to better
characterize reasons for nonpayment and
match these to effective best practices. It
also reviews a multitude of strategies and
practices currently in use, and organizes
these into strategy menus. Additionally, the
business process framework is useful to
identify gaps in a utility’s program.