End of the winter break: what are the challenges for energy suppliers?

Every year, April 1 marks the end of the winter break, a period during which electricity and gas cuts are suspended. This is a delicate transition phase for players in the energy market. While the truce in place protects the most vulnerable households, the accumulation of unpaid bills can put a strain on the relationship between energy companies and their customers. Between the delicate debt collection procedures and the assessment of the solvency of new customers, the challenges faced by energy suppliers are numerous. Discover how the Meelo solution effectively helps them deal with them.

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The winter break in question

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La Winter break takes place every year between November 1 and March 31. It is a period during which the eviction of a tenant is suspended, even if the tenant no longer pays his rent.

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Created in 1956 following the call of Abbé Pierre to protect tenants during the coldest months of the year, it is extended to energy suppliers by the Brottes law of 15 April 2013. This law Prohibits electricity and gas cuts, including in the case of unpaid invoices.

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However, the reduction of the power of the electricity meter is authorized, except for beneficiaries of the energy check or the Housing Solidarity Fund (FSL) who must keep their electrical power the same.

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La Winter break has a significant impact on energy suppliers who must manage unpaid bills while ensuring the continuity of service.

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Although it offers a temporary respite to homes in a situation of fuel poverty, however, it does not mean the cancellation of debts. At the end of the Winter break, on 1 April, energy companies are again authorized to take action in the event of unpaid bills.

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End of the winter break, the difficult balance to find for energy companies

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La End of the winter break marks a crucial transition period. The obligation to maintain the supply of energy during the truce may have led to the accumulation of significant debts. These amounts must be recovered to maintain the financial balance of energy suppliers.

At the end of the truce, they are again authorized to take action to recover these unpaid debts.

Among them:

• the resumption of electricity and gas cuts;

• the reduction of electrical power;

• the initiation of recovery procedures, such as reminders, formal notices, wage seizures or legal actions;

• the invoicing of collection costs.
  

These actions, although necessary, can be complex to implement due to the large volume of files to be processed and be perceived negatively by customers.

In addition, the end of the winter break coincides with a time of year when energy consumption can still be high, especially if temperatures remain cold. Overly strict actions, combined with inflation and rising energy prices, can worsen the fuel poverty numerous homes.

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Les energy providers must act tactfully and find the right balance between collecting unpaid bills, maintaining customer relationships and taking into account possible financial difficulties for some households. In a tense market, the end of the winter break must be anticipated in order to put in place preventive, flexible and adapted strategies.

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Energy suppliers facing the risk of non-payments in the post-winter break

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La Post-winter break also confront the energy operators at the risk of insolvency of their customers.

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This risk is difficult to anticipate with traditional tools, especially when the data collected is limited to basic contract information (name, first name, address, etc.) and is based on the customer statement.

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Traditional creditworthiness assessment methods are insufficient to deal with the complexity of personal situations. In this context, energy companies have every interest in enriching the knowledge they have of their subscribers with more reliable and more complete data in order to adapt their offers and limit the financial losses associated with unpaid invoices.

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Beyond this problem, during this period, there is a risk associated with the arrival of bad payers from other energy companies. Indeed, some customers who have accumulated arrears with their energy supplier anticipate the end of the winter break and the risk of cuts and seek to change service provider. Suppliers are therefore facing an influx of new customers, a significant portion of whom will then present a bad payer profile.

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Meelo helps energy market players fight against unpaid bills

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Les energy suppliers are required to provide food for all households, including the most vulnerable ones. This obligation, although fundamental, complicates the management of the risks of non-payment. The end of the winter break intensifies debt collection work and highlights the importance of identifying at-risk customers. With its solution dedicated to energy companies, Meelo provides an adapted response by improving the financial risk management and by optimizing the customer journey.

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Optimized customer knowledge

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Meelo helps energy companies get to know their customers better through risk scores based on rich data. By analyzing information such as email address, phone number, bank details, and location, Meelo is in a position to assess the level of risk associated with each customer. These scores allow energy suppliers to adjust the customer journey accordingly, for example by offering adapted payment methods or by requesting additional guarantees from customers presenting a higher risk.

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Seamless and simplified customer integration

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The automation of customer integration processes offered by the Meelo solution makes it possible to accelerate the care of new customers and simplify their journey, by reducing delays and administrative procedures. It also helps to limit errors and fraud by automatically verifying the information provided by subscribers.

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More targeted risk management

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The Meelo solution offers a more targeted risk management, which translates into a reduction in outstanding payments and an optimization of acceptance rates.

By identifying at-risk customers, energy suppliers can implement more effective recovery actions and avoid unnecessary service cuts. This targeted approach also makes it possible to improve the profitability of the company, by reducing financial losses associated with unpaid invoices.

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Proven results from the first months of using the Meelo solution

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Within the first few months following integration, Meelo's energy supplier customers noticed a significant reduction in unpaid bills. This improvement is the direct result of an optimized customer journey, where the risk profile of each customer is evaluated in real time. Customers with a high score are asked to provide guarantees, which secures their contract and reduces risks for the supplier.

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The use of risk scores helped to reduce the risk, by identifying customers who have a high potential for non-payment.

At the same time, the Meelo solution improves the acceptance rate, maintains the customer experience, and reduces dropouts.

By increasing the reliability of subscriptions, it finally allows an increase in the lifespan of customers in the portfolio.

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