The Most Important Customer by J

The Most Important Customer By J. Wayne Leonard Reprinted from At Entergy we believe we have failed earnings growth exceeding the mar any time we have to disconnect a cus kets' expectations, average annual tomer who is unable to pay the utility earnings growth of 16 percent per year bill. And when we look at the costs of for four years, and 18 percent average providing electric service, the numbers annual shareholder return over that tell us that usually there are better period. That gives me confidence that business solutions than disconnecting we're on the right track in viewing and reconnecting the same customers profitability as an output of serving our over and over. If we don't help custom stakeholders well and not an input that ers find those better solutions, some constrains our day-to-day decisions desperate ones will attempt solutions that affect real people's lives. Eleven of with our wires that pose safety risks to themselves and potentially our em Why Act Aggressively for the thirty ... eight ployees. Since safety is Entergy's num Low-Income Customers? ber-one priority, this is an additional Entergy's perspective on low-income counties with reason for finding ways to keep the customers is grounded in reality-the power on in the first place. reality of the region in which we live child poverty This spring, I told Entergy's share and do business. holders that the most important cus We serve one of the most poverty rates higher tomers we have are the ones who don't stricken areas of the nation-the Mis have service. It doesn't matter whether sissippi River Delta. According to than even the it's due to failed equipment, a storm statistics released by the Children's De related event, or customers' inability to fense Fund, three of the nation's ten poorest u.s. pay their bills at this moment in time. counties with the highest child poverty I believe that no one in this country rates are in Louisiana and Mississippi, should have to worry about whether he states that Entergy serves. Eleven of the cities are rural can afford electricity for his home. To thirty-eight counties with child poverty live in the richest country in the world rates higher than even the poorest U.S. countzes In and sit idly by as if it isn't our problem cities are rural counties in Arkansas, that some families must choose be Louisiana, and Mississippi-all in Arkansas, tween food and heat is criminal. Entergy's service area. New Orleans, Our employees are setting a national Entergy's headquarters city, has the Louisiana, and standard by proving that a corpora third-highest child poverty rate in the tion-a utility-can serve all its cus nation. More than 40 percent of New Mississippi tomers (including those having diffi Orleans children (51 ,707 out of 127,566 CUlty paying their bills) with dignity, re persons under age 18) live in poverty. all in Entergy 's spect, and compassion and still earn a We have made it a priority to provide fair profit. Some people will tell you, solutions to our low-income custom erVlce area. "Your only responsibilities are to the ers because, quite simply, it's the right shareholder and to obeying the law. thing to do. It's also the smart thing. The law defines morality when it Right now, approximately 25 percent of comes to your obligations to the en Entergy's 2.6 million customers fall be vironment and the impoverished." low the poverty line. On a daily basis, These attitudes are widespread in this many of our customers worry about country, particularly in the corporate whether they will be able to provide world. basic necessities to their family. Some At Entergy, we don't accept this ei how, most of them manage to get by therlor approach to our responsibili and pay their utility bills on time, in ties. In fact, we've proven that whole full. So there is a simple business basis idea wrong. Growing returns to share for Entergy's low-income strategy holders have gone hand in hand with more than $631 million. That's what social responsibility and improved ser low-income customers and the work vice to customers. Since mid-1998, ing poor contribute annually to Entergy has had 16 straight quarters of Entergy's revenue. 48 E L E e T R I C PER S P Ee T I V E S S E I' I E M 8 E R / 0 C T 0 B E R 2 0 02 49 The overwhelm" ! ing majority of our low,income and working poor customers are no different from the rest of us. I They are good people, responsible citizens, and good credit risks .... 'There is one big difference. Their "energy Social, Cultural, and Economic Myths needs have not diminished, and the Like the bumper sticker that says, truly needy still are making wrenching burden" is often "Question Authority," we need to ques decisions about whether to buy food or tion what we "know" about the poor. medicine or pay their utility bill. three or four times Over the past three years, Entergy • "Benefits are generous and widely did that kind of questioning by study available to deserving poor people." A what it is for ing our low-income customers. Though recent survey asking Americans how the research is far from complete, our much money they believe welfare re the middle"income current findings reveal that the whole cipients receive per month, showed debate about customers "at or below that most think benefits are stagger household. the federal poverty level" suffers from ingly higher than those actually paid. a series of myths and misconceptions In other words, Americans believe wel about the poor. fare recipients get enough taxpayer We all have heard the conventional money to live by standards most of us wisdoms: take for granted. As for being "deserv • "Welfare reform is working since the ing," I know of very few people who public assistance rolls are dropping." choose to be poor-and they are mem That notion is highly debatable. The bers of the clergy who took a vow of best that can be said, in my mind, is poverty. No one inherently "deserves" that welfare reform has transferred to be penniless, so it's hard for me to people off the welfare roles to the ranks think of any poor person as more "de of the working poor. In our area, the serving" than another. 50 E LEe T RI C PER S PEe T I V E S • "There are plenty of charities around come families that have tremendous Many working poor and elderly are among to help the poor." There are plenty that loads of consumer debt. Also, low-in the 31 million people in the United States at or want to help, but their resources are come customers, especially the elderly below the poverty level. For a family of four, stretched thin. Since September 11 and poor, tend to pay their bills on time that level is an annual income of $17,184. the downturn in the national economy, since so many of them live on fixed in many auxiliary sources of assistance comes and have life experience in by traditional communication chan have been drying up. Charities have managing money. nels. Many times even our own em had a harder time raising money and ployees were unaware of these policies. faced more demands on their services. Identifying Our Low-Income An example is the availability of fuel Many food pantries and homeless Customers' Needs fund payroll deductions, which were shelters across the nation are reporting Myths about the poor have justified not promoted until very recently. increased pleas for support. complacency about their needs. And With the launch of Entergy's low-in • "Most poor people are deadbeats for all the statistics that can be cited come initiative in 1999, we began who choose to live wastefully, squan about how society has turned its back questioning misconceptions about the der their money, and willfully refuse to on the less fortunate, our analysis poorer customers in our region, and pay their bills." Our research showed found that Entergy's historic track we moved to rebuild our customer ser just the opposite. As a class, poor cus record had not been much better. Even vice policies based on aU our custom tomers exhibit no worse credit behav though our company always has had ers' needs. ior than any other class. In fact, many policies to assist customers, they The overwhelming majority of our low-income customers are more reli often were unknown to the vast major low-income and working poor cus able when it comes to paying their ity of customers, especially those with tomers are no different from the rest of Entergy bills than those middle-in low incomes who were harder to reach us. They are good people, responsible SEPTEMBER/OCTOBER 200 2 51 We decided to stop battling and start helping our low ... income li' ~ fi customers. We ~ ~-~~-""" !1i are leveraging our A resident of Tunica County, MS-part of • They are loyal customers, rarely com Entergy's territory-where 45 percent of the plain, and almost never call our phone corporate size population is below the poverty line. centers or seek special service or atten tion. They give us high customer satis and strength to citizens, and good credit risks. In fact, faction scores. most have never received a late-pay Customers like this would be an as become the ment notice or had a disconnection.

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