Communicating with customers about changes to their electric bills can be a challenge for utility leaders. Particularly now, with so much uncertainty around the economy, people are skeptical about what’s behind adjustments to the prices for the essential goods and services they rely on to live.
Most customers are not familiar with — or interested in — the technical terms used to explain changes in electric prices. What they want to know is what the change will mean to their pocketbook in real terms, and if there is anything they can do to lessen the impact.
For public power, the electric bill is more than just a bottom line; it ties back to how the community perceives and values local services. Connecting the dots simply and clearly for customers between what the community is hoping to accomplish and how that’s reflected in price adjustments can help lessen detraction — and even gain support — across the community.
More Comms, New Channels
For years, customers of Guam Power Authority have complained about the high cost of electricity, which for the average residential customer reached about $359 per month for 1,000 kilowatt-hours in January 2025. That’s an extraordinary financial burden for residents of the Pacific island, which has a sizable proportion of low- to middle-income households. The high cost stems from the island’s heavy reliance on expensive fuel oil to generate its electricity. Fuel costs made up as much as two-thirds of the customer bill.
In response, around 2018, GPA decided to build a new, 198-megawatt, highly efficient natural gas combined cycle power plant. In communicating this intention, and the progress of that plan, GPA officials consistently emphasized that this new power plant would ultimately lower customers’ electric bills. The new plant would be much more efficient than the aging Cabras Power Plant, which opened during Richard Nixon’s presidency and burned fuel oil.
A sharp increase in customer communications is at the heart of the changes to base rates and fuel costs that GPA is seeking to implement this year. Acting Communications Manager Joleen A.A. Cruz estimated the utility is doing four to five times more communications about its price changes compared to prior years, when the utility was only changing its fuel cost adjustment factor. The utility has not increased its base rates since 2013. The rate for fuel cost is reviewed twice a year by the Guam Public Utilities Commission based on recommendations from GPA.
In its customer communications, GPA has positioned the new Ukudu Power Plant, scheduled to begin operating in September, as being a response to customer expectations.
“We have had meaningful and continuing conversations about Ukudu Power Plant with customers for years,” said Cruz. “We have taken a proactive approach to our communications. Our customers expect reliable and affordable electric service, and bringing Ukudu online will help meet those expectations.”
The utility projects that when the new generating station comes online, monthly bills for residential
customers will fall about $77 per month, to approximately $282 for 1,000 kWh of electricity. While base rates will increase slightly to begin recovery of Ukudu’s capital costs, the efficiency of the new plant will sharply lower the fuel component of bills, and it is designed to use dual-fuel: ultra-low-sulfur diesel and liquefied natural gas. Should LNG become less expensive, GPA has the ability to switch and utilize that fuel. Overall, electric prices and bills are going down, and the utility has emphasized the net impact of the changes.
Among other tactics, according to Maripaz N. Perez, GPA’s assistant chief financial officer, GPA arranged to have officials appear on two morning drive-time radio programs, where they could answer questions from callers and the hosts about the electric price changes. The strategy turned out to be a hit.
Focusing on the Why
Lebanon Utilities, located about 30 miles northwest of Indianapolis, is experiencing growing pains. Large loads, including a data center and a pharmaceutical manufacturing plant, are coming to the area.
The residential growth that is expected to follow those new large loads is also expected to double or triple the public power utility’s customer count in five years. Right now, the utility serves about 10,000 customers. It provides electric, water, wastewater, and internet services.
While the utility hasn’t increased its base electric price in over a decade, it gained some insight into how talking about rates and prices affects customer sentiment when it withdrew from the jurisdiction of the Indiana Utility Regulatory Commission a few years back.
“This decision to withdraw from IURC regulation was driven by the need to regain local control and address long-standing structural issues that made it difficult to respond quickly to market shifts — especially the recent transformer supply chain crisis,” said Ed Basquill, general manager of Lebanon Utilities.
Lebanon will need a lot of new transformers to meet the needs of its anticipated growth, but its ability to make that growth pay for itself was hamstrung by IURC regulation. The regulatory panel required all customers to pay for the incremental cost of new transformers and equipment to serve new large-load customers. Facing transformer costs that could be more than five times what they were before the COVID-19 pandemic and waiting 12–18 months to get through an IURC rate case was unacceptable, Basquill said.
That spurred Lebanon Utilities to engage in a “significant” public engagement effort focused on exiting IURC regulation. The utility held multiple public hearings, developed targeted education for decision-makers, and conducted broad customer outreach, including mailers, a public-facing YouTube archive, and active monitoring of social media.
In an FAQ to its customers, the utility said it “would like the ability to adapt more quickly to the changing development within the City with the goal being to be protective of our ratepayers as the development occurs. The Utility Board operates under the philosophy that development should pay for development.”
Withdrawing from IURC regulation “helped us shift the conversation from reactive regulation to proactive governance,” Basquill said. “For years, I had worked to build support with our service board and city council. That gave us the credibility to move forward.”
The utility received few public comments about its plans to exit IURC regulation. That insight, Basquill said, shaped how the utility plans to communicate any future price changes. Lebanon Utilities’ communications plan now centers on building stakeholder confidence; operating transparently and efficiently; providing crisp, non-technical information to the community; and communicating frequently using a variety of channels.
“Communicating the ‘why’ is just as critical as the ‘how much,’” Basquill said. “If customer-owners accept the ‘why’ they are more likely to accept — within reason — the ‘how much.’”
He also recommends phasing in any price increases, drawing on LU’s experience raising water and wastewater charges a few years back.
“People like to budget; they don’t like surprises,” he said. “People won’t get bent out of shape if your increase is about the cost of living.” Basquill recalled that there was no major public outcry when those water and wastewater prices rose about 20% over five years.
Utilities “are a people business,” he added. “You can’t push on a rope. But you can pull it toward you. If you bring your stakeholders and your community along with you on a journey, good things can happen.”
Knowing Your Audience
Utility leaders sometimes suffer the curse of knowledge: They know so much about their business that it can be hard to pare that back and use customer-friendly terms. Also, communications laden with facts and details can cause a customer’s eyes to glaze over, to the point where they miss the utility’s main message.
GPA overcame that by creating customer-friendly messages with its communications and customer engagement partners.
“We have found that we can lose the attention of our customers if we try to provide too much information,” Perez said. “At the end of the day, we need to communicate with customers using words and infographs that they can relate to.”
She said, “When I talk to my mother and brothers about changes in their electric bill, they say, ‘Just tell me the bottom line — will I pay more or less?’” When Perez told them they could save nearly $930 per year, she recalled how one of her brothers said, “Great — now I can pay off my roof!”
In explaining its fixed costs, particularly the new power plant, GPA communications did not use terms like “infrastructure” or “baseload.” Instead, it referred to those costs as similar to a home mortgage. “People understand what a home mortgage is, so we have decided to use that to explain our utility’s fixed costs, such as bond payments,” Perez said.
Given the sizable population on Guam that falls into low- to middle-income brackets, GPA recognized that focusing on the net financial and reliability benefits associated with the new power plant, combined with sustainability messages, would be most effective.
Perez said. “Sustainability, reliability, and affordability are all part of GPA’s balanced approach on messaging. Our messages have been that the Ukudu Power Plant is more efficient and cleaner than the older, aging power plants, and through its efficiency and reliability, customers will see a reduction of overall costs of power on a sustained basis.”
Relative Value
Although GPA and Lebanon Utilities were able to talk about decreasing prices, most often, utilities are delivering the message that prices are going up.
Across the U.S., residential electric prices increased 7.2% between 2022 and 2023. However, the increase is primarily led by investor-owned utilities, whose residential rates increased 8.4% compared to the rates of cooperatives (0.9% increase) and public power utilities (0.1% increase). From 2017 to 2023, the average public power utility residential rate increased 1.7 cents per kWh, whereas residential customers of IOUs saw their rates increase 3.3 cents per kWh.
While it’s helpful to look at the average rates, customers will typically be more focused on the affordability of their monthly bill.
Comparing their electric prices to adjacent IOUs or cooperatives has been a time-tested and successful message for many public power utilities. In 2023, public power utility residential customers had average electricity bills that were 12% lower than those for customers of IOUs and 22% lower than the average bill for a residential customer of a rural electric cooperative.
Increasing prices doesn’t mean that customer satisfaction will take a hit. Utility communicators recommend having an ongoing conversation about prices, not just when they go up (or down). Any time prices go up because of an outlay made in response to the community’s wishes, be sure to emphasize that. There’s no one-size-fits-all solution because each public power community has different needs and expectations, but it is important to remind customers of the greater value that they receive from their community-owned utility.
Think Outside Your Four Walls
If a utility is raising prices, offering customers new ways to stretch their dollars or pointing out what control they have over their energy use is advisable, public power communicators say. Whether using prepay or levelized billing, energy efficiency programs, or the option for customers to track their energy usage through an online portal, raising awareness of these options can help make customers feel more supported.
Utilities frequently develop programs to help customers manage their electric use and bills, but those programs often fail to achieve their enrollment targets. The same goes for direct financial assistance to customers who have trouble paying their electric bills: Earmarked dollars are left unspent at the end of the year.
One way to counter that is to spend more time thinking about communications channels: How can a utility get the word out? One key strategy is taking the time to get in the customer’s shoes. Low-income or hard-to-reach customers might not read utility communications or may not speak English. Customers might not feel comfortable going to a utility, particularly one affiliated with city government, for any number of reasons. All of these factors will keep them from going to utility offices to seek assistance. But many of those who struggle know where to find assistance at community service organizations, such as food banks. Those organizations have advocates who are trained to seek and apply for financial assistance on behalf of those for whom they support. If energy assistance programs remain underused, partnering with community organizations could be another communications channel to boost uptake for programs and aid.
