August 11, 2003—While there has been some confusion in the energy industry regarding the fixed bill, this premium product offering is beginning to catch on, reports Chartwell. Utilities can earn about $1.3 million in pre-tax income for every 25,000 customers on the program, according to Chartwell sources, and reported in Chartwell’s latest report, “Fixed Bill Programs for Mass-Market Customers”.
The fixed bill has no rolling adjustments or end-of-the-year true up. Over the course of 12 months, customers never have to pay more than a quoted amount, no matter how much their usage increases, even if underlying rates go up. Participants in fixed bill programs pay a premium that helps the utility cover their various weather, moral hazard, and other risks.
The fixed bill offering makes sense for utilities that want to give consumers an option that provides complete predictability. According to utilities already offering the product – including Duke Power, Georgia Power, and Alliant Energy—the fixed bill increases customer satisfaction even among customers who choose not to participate. These utilities and others are examined for in-depth case studies in the report.
“Fixed Bill Programs for Mass-Market Customers,” available from Chartwell for $295, also presents and analyzes data specific to flat bills from Chartwell’s Products and Services survey of 86 utilities conducted in 2003, as well as historical data from past Chartwell surveys.
For more information about the Chartwell report, call 800/432-5879.
