Economic Outlook and Utility Companies' Strategies for Recovery: A Glimpse into the Future

Shareholders Sara Costanzo and Amanda Yurechko recently attended the Conferences By Monticello 2025 Annual Utilities Credit & Collections Symposium in Miami-Coral Gables, FL. Now, Amanda is sharing her top takeaways from the event!

Zak Alvarez of TransUnion shared valuable insights into the economic outlook and the state of consumer finances, revealing both positive and concerning trends. Here's a quick rundown of the key points from his talk:
 

Economic Outlook Highlights

The labor market shows a strong recovery, with unemployment rates at 4%, a significant decrease from previous peaks. Key employment metrics, such as average weeks unemployed, total hires, and job openings, are now back to pre-pandemic levels. However, inflation remains a concern, still at 3%, which is above the Federal Reserve’s target of 2%.

When it comes to household finances, utility payments continue to make up less than 10% of household income for most consumers. However, those struggling to pay their utility bills report significant financial strain. Many have experienced a sharp income decrease in recent months, with job losses, pay cuts, and reduced hours cited as the primary causes. TransUnion data also reveals a reversal in the positive trend of credit scores, with credit card utilization rates now surpassing pre-pandemic levels and delinquency rates on the rise. Interestingly, consumers who can’t pay their credit card bills are twice as likely to miss utility payments.
 

Utility Companies' Strategies to Maximize Recovery

In response to these financial challenges, utility companies are adjusting their strategies. Instead of applying blanket policies, they are focusing on targeted approaches to maximize recovery. One approach is identifying accounts most at risk of shutoff while separating residential and commercial accounts for more tailored analysis. Additionally, campaigns are being developed based on the specific stage an account is in—whether it’s newly past due or in the late stages of delinquency. For instance, text reminders are much more effective for accounts that are newly overdue, compared to those that are already on the verge of shutoff.
 

AI's Role in Shaping the Future

Artificial Intelligence (AI) is at the forefront of discussions among utility companies. AI is being used to analyze data and better target customers who are likely to pay, as well as to trigger timely reminders and identify high-risk accounts. However, utilities emphasize the importance of maintaining human involvement in decision-making processes, ensuring compliance with policies and laws—such as avoiding winter shutoffs or shutting off services to high-profile clients.

Looking ahead, AI could help utilities refine billing procedures by evaluating consumer payment preferences, forecasting the likelihood of defaults, and flagging accounts for attention before they reach critical stages. This shift toward AI-enhanced strategies aims to improve both operational efficiency and customer service, particularly in an economic environment where financial stability is fragile for many.

The economy is showing signs of recovery, but financial struggles remain for many, especially in areas like utility payments and credit card debt. Utility companies are adapting by using more targeted, data-driven strategies and considering AI as a tool for smarter, more efficient operations. Balancing technology with human oversight will be crucial in ensuring fair and effective solutions for consumers moving forward. 

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If you have any questions about these topics or would like to learn more about Weltman’s consumer collections solutions, connect with Amanda today.

This blog is not a solicitation for business, and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.