CU services in excess of 30,000 electric customers.
For the past 1 1/2 weeks, customer newsletters explaining the project, how it operates and who it helps have been arriving in area mailboxes. The newsletters are included inside CU’s monthly billing statements.
Because billing involves a full one-month cycle, customers will continue receiving the newsletters through the end of the month. Project Round-Up will not be implemented until all customers have been notified officially by the utility company.
Until then, the utility won’t know for sure how many customers prefer opting out of the voluntary initiative. But the numbers so far are encouraging, according to Ken Webb, CU senior vice president and CFO. At present, only 322 have asked not to participate.
The fact that CU customers have already been exposed to the new program through the news media since late September, and because a minimal number have opted out so far, Webb believes this could be a sign that the public approves of the family outreach.
“I think people will support Project Round-Up because most everybody knows some family that is struggling,” according to Ken Webb, CU senior vice president and CFO. “If you’re involved in the community, it would be hard not to know a family that’s having a difficult time. This is an easy way to help them.”
He pointed to one of the program’s strengths — that its financial impact on individual customers is small, but its collective good on families in need is big.
“The whole idea behind Project Round-Up is that if everybody does a little, nobody has to do a lot,” Webb said. “I think people will be supportive of it. Other utility companies [that provide this type of program] get good participation rates.”
One is Volunteer Energy Cooperative which provides a similar outreach to its customers. A key difference is that VEC distributes its customers’ donations to a variety of nonprofit groups and civic causes.
By contrast, CU has identified struggling families as its target recipient. Donations collected through Project Round-Up will be set aside in an emergency fund and then transfered to The Caring Place whose social workers will coordinate the interview and distribution process for families facing difficulty with their utility bills, as well as those needing help with housing and medical needs, and related emergencies.
The funding formula, as agreed upon by CU and United Way of Bradley County Inc., is that 80 percent of the contributions will be used to meet utility needs and 20 percent to housing, medical and other approved family emergencies.
Although United Way was asked to help design the program, CU customer donations are not part of the annual United Way campaign nor are they used to cover any administrative costs to CU, United Way or The Caring Place, Webb explained.
Project Round-Up’s concept is similar to the VEC program; however, it most closely resembles an operation by the Jackson Energy Authority. The West Tennessee program is geared more toward helping individual families.
Also, Project Round-Up does not limit its aid to Cleveland Utilities customers. Bradley County residents who are serviced by other utility providers are eligible for emergency help.
The program operates like this. CU customers’ bills are “rounded up” to the next dollar amount. For example, if a customer’s monthly bill is $35.69, it will be rounded up to $36 on the mailed statement. The 31-cent difference will be placed in the emergency account and then transfered to The Caring Place for disbursement to eligible families in need.
On average, the practice is expected to cost the typical CU customer about $6 per year. The amount that could be added to any single monthly bill would range from one penny to 99 cents, depending on the actual billed total.
The net result is an estimated $100,000 per year to help meet families’ emergency needs; and this is based on a participation rate of only 50 percent.
“I believe we will exceed the 50 percent,” Webb said. “We used that number initially as a conservative estimate.”
CU’s goal is to encourage as many utility customers as possible to remain in the program. Those who don’t wish to participate may “opt out” simply by contacting Cleveland Utilities. The decision to remain with the program, or to leave it, lies strictly with the customer, Webb stressed.
“We’d obviously like to see as close to 100 percent participation as possible,” the CU veteran advised. But he accepts that some will not wish to continue in the initiative.
Even though some believe the sluggish U.S. economy is improving, Webb said most communities still have families that struggle. Cleveland is no exception.
“There is never enough money out there to meet all the needs,” he pointed out. “Because of the economy and the times we’re going through, there’s still a lot of needs. But maybe a program like Project Round-Up can help a little.”
CU chose to automatically include all electric customers in Project Round-Up — and to provide the means for opting out by a simple telephone call — because of the expected response.
“Administratively, it’s easier to do this on the front end and then let customers choose to opt out,” Webb said. “We felt more [customers] would participate.”
For this reason, he added, “It would be easier to take out a smaller number of customers not participating than it would be to add a larger number who wanted to opt in.”
Webb said in recent weeks since Project Round-Up’s unveiling, and its utility board approval in late October, he has been encouraged by customer response.
“I’ve heard some positives in the community about it,” he said. “We’re excited about this program.”
Actual implementation — that is, the first “rounding up” of customers’ bills — is expected to begin at the end of this month once the latest billing cycle is completed and all customers have been officially notified by the mailed newsletter.