The energy market: consumption, arrears and debt collection

The energy market in Italy continues to evolve and the 2018 data confirm a dynamism both in terms of operators and end consumers.

Overall, energy consumption remains basically stable with an increase of 0.5% compared to 2017 (303.4 TWh); on the other hand, the gross domestic product fell (-1.8%), which managed to cover 87.1% of total national consumption.

At the level of operators, on the other hand, the sector remains decidedly dynamic with the birth of 73 new sellers on the free retail market (+ 12.9%) and an overall market of 638 subjects.

On the other hand, the phenomenon of switching also increases, with the passage of customers from one operator to another, which rises by 10.3%, data almost entirely attributed to the domestic market.

Debt collection companies

One of the main problems for Utilities, regardless of the commercial fluctuations of the market, is the phenomenon of arrears. In 2018 the companies in the Utility sector entrusted approximately 13.1 million files to the debt collection companies (46% of the total in Italy).

At the level of amounts, 7.14 bn unsolved outsourced (26% of the total), data related to the average ticket value of the energy sector which is certainly lower than in other sectors, see the financial one; in fact, it ranges from USD 546 in the average ticket for Utilities to USD 2,118 in Banks and USD 1,488 in Financials.

If we then explode the data previously exposed by type of user, dividing them between active and discontinued customers, the average values ​​of the credits assigned also vary. Unpaid bills relating to active customers represent 52% of the total files but, on the other hand, cover 45% of the amounts entrusted to recovery.

At the same time, the ceased clients ‘ practices incorporate the remaining 48% of cases and 55% of the value in euros. The inconsistencies relating to practices and amounts are due to the difference in the average tickets, which goes from USD 542 for active customers to USD 722 for discontinued customers. Keep in mind that this gap has significantly shortened compared to 2017 where it went from USD 498 to USD 1,317.

Importance for the credit manager


One aspect of fundamental importance for the credit manager is then certainly relative to the recovery performance of the receivables and its trend compared to previous years. In terms of a number of files, the Utility sector recorded a 28% recovery in 2018 while as regards the amounts, the result stood at 20%.

The trend is fluctuating with a worsening compared to 2017 as regards the number of files recovered, which goes from 31% to 28%. On the other hand, there has been an improvement from 13% to 20%. These opposite results are also influenced in this case by the differences between active and discontinued customers.

Debt collection on active customers


The debt collection on active customers, in fact, records 37% on the paperwork side and a 31% on the amount side. On the other hand, on the discontinued customers, the same data are clearly lower with 19% and 13.7% for the two types of customers.

If you look at the performance of previous years, it is essential to underline the progressive decrease in the data relating to the number of practices on assets, from 52% in 2016 to 43% in 2017 up to 37%. On the contrary, the amounts recovered went from 28% to 23% and then went back to 31%.

On the other hand, the data relating to the terminated items improved, from 16% in 2016 and 2017 to 19% in terms of practices. On the other hand, the fluctuating trend is confirmed with 9.4% in 2016, 6.4% in 2017, and the positive result of 13.7% in 2018.

To summarize the data shown and understand the size of the phenomenon of default in the energy sector, it is sufficient to highlight its evolution. The receivables assigned for recovery in 2017 were made up of 38% by the unpaid utility world, in 2018 these represent 46%.

This impact on the world of recovery leads Utilities to develop increasingly elaborate credit management systems, approaching financial management. Another weapon is the creation of strategic partnerships with Servicers and Info providers specialized in the utility world, for the creation of procedures and information flows suitable for the peculiarities of the sector.