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How Utilities Can Help Customers in Crisis as Moratoriums End

March 11, 2021

The full economic impact of the COVID-19 pandemic will likely not be known for years to come, but there have been some very immediate and obvious impacts–like job losses. The U.S. experienced an unprecedented unemployment rate of 14.8% in April 2020 before declining to a still-elevated level of 6.7% in December. Few industries were left unscathed but stay-at-home orders and mandated restaurant and bar closures were particularly devastating for the leisure and hospitality industry. This sector recorded an unemployment rate of 39.3% in April 2020 before dropping to 16.7% in December. After a brief recovery, Canada saw unemployment rates rise again by 0.6% to 9.4% in January 2021, which was the highest since August 2020. While employment numbers show some reasons for optimism, consumers are certainly not out of the woods yet.

Customers Still Need Support

In October 2020, KUBRA surveyed a group of utility employees and asked what percentage of their customers they thought would have issues paying their utility bills once the moratoriums are lifted. Here’s what we found:

  • 39% of respondents said 15-29% of their customers will have issues paying their utility bills.
  • 35.5% of respondents said 30-40% of their customers will have issues paying their utility bills.
  • 11% of respondents said 50-79% of their customers will have issues paying their utility bills.

Utility Moratorium

Further research by the National Energy Assistance Directors' Association (NEADA), paints a similarly troubling view of the financial instability of both residential and small business owners. NEADA data shows that residential and small business customers could owe $35–$40 billion to their utilities by March 2021. By then, individual unpaid bills may be as high as $1,500 to $2,000, which is as much as some customers pay for electricity in a year.

Utilities Can Help With Sustainable Payment Assistance Programs

The two key ways utilities can continue to support their customers are with pre-pay energy programs and payment assistance programs.

Pre-pay energy solutions allow utility customers to add money to their utility account before energy is used. As the power is consumed, the pre-paid balance declines. Pre-pay options are popular with a wide variety of utility customers because they give them more control over their energy usage and payment schedule. For limited-income individuals, who the COVID-19 pandemic has hit the hardest, these programs are especially attractive, and for good reason!

  • 20% of low-income individuals’ net income goes toward utility costs.
  • 46% of low-income adults have struggled to pay their bills since the pandemic hit in March 2020.
  • 39% of uncollected electric bills are attributed to changes in unemployment rates.

Repayment Plans Work

Pre-pay programs are especially appealing to low-income customers because they offer the ability to pay down their debt while keeping the lights on. Repayment plans allow pre-pay customers to gradually catch up on their outstanding debt and at the same time continue to make their regular monthly payments. Pre-pay programs also help ensure fewer missed bill payments and reduce the cost (and inconvenience) of energy shut-offs. This not only empowers customers but also allows utilities to collect debt payments during an economic crisis.

According to a TransUnion study of over 24,000 consumers from March–June 2020, when moratoriums and financial accommodations come to an end for utility customers, 34% said they would prefer a repayment plan. One that allows them to gradually catch up on the outstanding debt, while still being able to make their regular monthly payments. There’s evidence that this approach works too. A North Carolina utility participated in a one-year pre-pay pilot program with 594 customers. 82% of participants paid off their deferred balance during the pilot and the remaining 18% continued to make payments after that.

Payment assistance programs are another great way for utilities to help ease the financial burden of their customers, especially if they are easy and convenient to use. These programs increase payment flexibility by allowing customers to request payment assistance from family and friends.

To answer the call from our clients for more payment solutions that help their customers through tough times, we introduced KUBRA Boost™–a payment assistance feature in KUBRA EZ-PAY. Customers can share a system-generated link with family and friends so they can make a bill payment on the customer’s behalf. This link conveniently takes them directly to their KUBRA EZ-PAY account where they can make payments.

Multiple Payment Options

In addition to offering payment assistance programs, it’s important to give customers choice when it comes to payment methods, especially those struggling to make timely payments. By offering multiple payment options such as in person, digital (online, mobile), voice, pre-pay, and artificial intelligence, utilities help their customers pay on time by giving them a variety of convenient ways to pay their bills.

Proactive Communication Is Key

Utilities that really want to support their customers can’t do so with assistance programs alone because if customers don’t know they exist or how they work, they won’t take advantage of them. That’s why utilities need to proactively communicate with customers ensuring they are aware of these assistance programs. This includes information on the importance of paying their bills, ways to do so, what kind of assistance and/or programs are available, and how they work. It’s a good idea to recommend that customers in need use these programs well before payments are due to avoid disconnections. Communication plans should be broad and include all available channels including email, text, and outbound phone calls to reach the greatest number of customers possible.

Prepare for the Economic Rebound to Be Slow

It will take time to recover from the widespread economic devastation caused by COVID-19. Even when the bulk of the world is vaccinated and the pandemic starts to recede, utilities will need to find effective ways to dig their way out of debt. By introducing pre-pay programs and payment assistant programs, utilities can continue to assist their customers with solutions that also allow them to begin their journey to economic recovery.


  • FAS.org. Unemployment Rates During the COVID-19 Pandemic: In Brief. January 2021.
  • Trading Economics. Canada Unemployment Rate. February 2021.
  • Utility Dive. Utility customers owe up to $40B in COVID-19 debt, but who will pay it? December 2020.
  • Investopedia. “Which Income Class Are You?” 2019.
  • NPR. “U.S. Census Bureau Reports Poverty Rate Down, But Millions Still Poor.” 2019.
  • Government of Canada. “Canada reaches lowest poverty rate in history.” 2019.
  • TransUnion. Helping Utility Companies Understand Financially Stressed Customers During COVID-19. September 2020. 
  • Sowell Gray Robinson. Duke Energy Carolinas Prepaid Advantage Pilot Learnings Report. 2015. Solomon, Noah, The utility response to COVID-19 offers lessons in handling future crises, Chartwell, February 17, 2021.
  • Solomon, Noah, The utility response to COVID-19 offers lessons in handling future crises, Chartwell, February 17, 2021.

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