Utility Week

UTILITY WEEK | 28TH JUNE - 4TH JULY 2019 | 19 Operations & Assets Operations & Assets the treatment works in operation by the end of the year, using cutting- edge technology and energy-efficient processes to treat up to 8 million litres of water every day. The project is part of a £21 million total investment to improve tap water quality for more than 25,000 people in north Northumberland – construction will start on another new £10 million water treatment works in Wooler later this year. If you have an asset or project you would like to see featured in this slot, please send pictures and details to: paulnewton@fav-house.com Market view Flexible payment can work for all Utilities must adopt innovative approaches to help customers control debt before it becomes unmanageable, says Harvey Hieke. B ad debt continues to be an endemic problem for UK utilities. It's been a critical industry agenda point for some time, yet there is no indication a dent has been made in the £2.2 billion owed to water companies alone, discovered by Ofwat and PwC in 2017. The lack of progress in tackling the issue has meant the importance of collecting revenue effectively now goes beyond its most obvious commercial dimension. Managing debt, and in turn reducing the cost to serve, has become a significant competitive and reputational differentiator for utilities. More so than ever before, water and energy companies are in the spotlight, the target of media pressure, scru- tiny from charities and, most recently, the Labour party's radical plans to renationalise the sector. In this climate, the methods energy and water companies use to collect revenue are arguably a more pressing consideration than balancing the books. Utilities cannot afford to treat customers struggling financially without care. If a customer is in arrears, water and energy compa- nies are obliged to offer a fixed payment plan that takes into account how much they are able to pay. However, by the time it gets to that point, the amount of debt the customer has accrued is o"en so large that they will struggle to pay off the full amount, leaving the utility out of pocket and o"en vulnerable people in even greater financial distress. To avoid this, utilities need to identify when customers are struggling to pay their bills and pro- actively use solutions that are o"en earmarked purely for customer experience purposes to help them proactively control debt before it becomes unmanageable. One great example of a solution that can help utilities do this is the provision of a flexible payment option. At Utility Week's recent Consumer Debt Conference, Npower's head of regulation said cancelling a direct debit is one of the first indications a customer is struggling to pay their bills. Some energy companies offer a payment option that allows customers to pay for exactly what they've used at the end of each month, instead of a flat rate. By expanding this, and giving customers the option to miss a payment through flexible direct debit, or pay a reduced amount if they cannot afford it – without can- celling their direct debit altogether – water and energy firms could help customers avoid spiralling into arrears that are hard to overcome, while maximising revenue. And by enabling them to better manage bad debt, utility companies can reduce their cost to serve, boosting their profitability and increasing their competitive advantage. Harvey Hieke, head of client and business development, Parseq

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