The Energy Industry Proposes Income Verification to Address Inequality
The energy sector is witnessing a radical change as utility companies propose making energy bills partially income-based. The concept aims to make energy access more equitable and affordable for all consumers. As a Verification of Income and Employment (VOIE) provider, we see this development as an opportunity for our services to be even more essential in ensuring a smooth and efficient transition to this new billing system.
In a recent article by KSBY News, it was reported that the utilities – Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric – have submitted a joint proposal to the California Public Utilities Commission (CPUC). If approved, this proposal would allow customers’ income levels to determine a portion of their energy bills, thereby ensuring that low-income households can access affordable energy.
Why Would Utility Companies Make this Change?
The introduction of income-based energy bills can have several advantages:
Fairness and affordability: By making energy bills partially income-based, low-income households will have better access to affordable energy services. This will contribute to the overall goal of energy equity and help bridge the energy gap among different income groups.
Better customer engagement: With a more equitable billing system in place, utility companies are likely to see increased customer satisfaction and engagement, as customers will feel that their needs are better catered to.
Do the Challenges Outweigh the Benefits?
With benefits for both consumers and utility companies, why wouldn’t California choose to adopt the proposed bill? Turns out there are massive technical challenges. Here are just a few of the potential challenges.
Initial Income Verification: How exactly do you verify the income of an entire state? Finding a way to cover that large of a population would be extremely difficult (for most solutions). Not to mention you’d need to give the residents of California an easy way to provide said information. California’s implementation of the proposed bill would quickly die if this went unsolved.
Inaccurate and Stale Data: Thought the hard work was done once everyone is verified? WRONG. California will need a consistent system to re-verify income. Residents of California are likely to change jobs at some point, and when they do their information will need to be re-verified. If a sustainable system isn’t set up, then a small army will be needed to maintain records or the data will quickly go stale.
Fraud, Fraud, and more Fraud: Believe it or not, creating a fake W2 is really easy (no this isn’t us encouraging you to go try it). California regulators and utility companies will need a way to verify the authenticity of someone’s income. Or maybe they’ll just hope no one decides to save money and cheat the system…
California Will Need Truv
Frankly, if California decides to move forward with this proposed bill it will need more than a verification tool. It will need the best verification solution on the market. Enter Truv. Truv solves the above challenges, and gives California an affordable way to verify every resident.
Unmatched Coverage: Truv’s income verification solution covers over 90% of the U.S. workforce. The nearest competitor covers 85% and traditional methods cover 30%. Truv is able to provide this level of coverage because of our breadth of data sources. We leverage payroll data, bank data, and tax data to verify income, which allows us to cover more of the population.
Unmatched Accuracy: Truv’s data primarily comes from API connections and is completely consumer permissioned. Contrast this to tools that screen scrape numbers and legacy databases that purchase information from payroll providers. Truv’s data is accurate, secure, and up to date. Once the connection is established, it’s easy to re-verify income just to make sure nothing has changed.
Fraud Protection: Truv prevents fraud by getting data directly from the source and by verifying the authenticity of manually uploaded documents. When Truv establishes a connection to someone’s payroll provider there is no way for fraud to enter the system. This is the case for over 90% of the population. But for residents that need to upload documentation to verify income, Truv offers fraud detection to make sure the documents are authentic.
We’re Here When You’re Ready
We will be following this proposal’s progress closely and if California decides to adopt the policy they can rely on Truv to make the new system work.. In the meantime, let us know your thoughts on income-based energy billing and its potential impact on the energy sector. We are always eager to hear your opinions and engage in meaningful conversations about consumer data and the ways society leverages data in an equitable manner.
