Building Credibility And Trust In Utility Services

Customers never want to pay more for something unless they see an increase in value. Paying for water and utility services is no exception. Utility customers expect to receive the same services at the same or reduced costs that they previously enjoyed. This makes raising water or utility rates a tricky proposition indeed.

It is a commonly held belief that because government controlled utilities don’t have profit motives, there is no upward price-pressure on the services these utilities provide After all, what motive would a government unit have to increase fees? Water Rate Consultants, who are generally charged with maintaining rate structures agreeable to consumers, advise utility clients to be prepared for events that would cause major rate increases.

The main challenge to entities seeking utility rate increases is a lack of public trust. Especially in the case of governmentally controlled utilities, overcoming this lack of trust is particularly difficult. Still, utilities may have very good reasons to seek increases in the rate and fee structure – not the least of which is to ensure that future consumers will enjoy reliable services.

Common public perception is that much of what government units spend is wasteful. Public examples of actual waste, abuse or even fraud only colors this perception even more negatively. In most cases, however, the perception that revenue from fees is poorly managed is just that: perception.

There are several tactics that utility managers utilize to repair the problem of negative public perception. The bottom line is that the utility must gain the trust of its consumer base – or in some cases re-gain it.

In Utility Rate Management, these tools must include the following: Planning Communication Execution Repeat process

Contingency planning – particularly for major system replacements or emergencies – is a major part of utility operations. Specialists can assign a relative degree of risk to whether certain aging systems may fail at some point in the future, and the contingency planning team should deal with these uncertainties.

The ‘Art of Communication’ is frequently lost on many utility managers. Customer expectations must be managed by an ongoing flow of data and information with the objective of preventing consumer ‘surprises.’ When an old water pipe breaks and needs to be replaced, it is an expected occurrence. When a major facility fails and the utility asks consumers to bear the cost of replacement, consumers are sure to ask why the utility didn’t plan more carefully.

The public must believe that the utility managers execute plans diligently and decisively. Customers who believe that those who are in charge actually know what they’re doing are more likely to support the financial needs of the utility. Building confidence is key. Avoiding surprises is perhaps the best way to re-build an organization’s credibility.

Repeating the process refers to continually re-planning, re-communicating and telling the stories of previous successful management events. Utility management that continually updates emergency plans, communicates and executes effectively are the ones that when rate increases are necessary, usually achieve success. After all, earning the confidence of the consumer base is the result of continuous effort.

Author Jason Mumm is highly respected among Utility Consultants. Operator of StepWise Advisors, Jason has years of financial management experience to each client engagement. A specialist in planning for facility upgrades, replacements or emergency events, Jason’s unique experience and soid base of experience makes him an integral part of any Utility Management Team.