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Tim Boyle could not quite believe his eyes. The Columbia Sportswear CEO pays a lot of bills, personally and for his company. It’s unusual for a supplier to offer him a big discount on something for which he pays full price.
But there it was: a letter from the Portland Water Bureau. “Dear Timothy Boyle,” the Oct. 14 letter read, “Your account has been randomly selected to participate in the Smart Discount Program.” Discount percentage: 40%.
Every year, thousands of Portland Water Bureau customers fall behind on their bills. Last year, KPTV reported customers owed the bureau $28 million in late payments.
Boyle was not one of the customers who fell behind. He earned more than $1.6 million in compensation last year, and his Columbia shares are currently worth more than $1.7 billion. He also uses a lot of water: The last time WW did its “Water Hogs” feature, in 2021, Boyle rated as the city’s ninth-largest residential consumer of water, going through more than 770,000 gallons, which we calculated was “enough for 124 Portlanders to take an eight-minute shower every day for a year.”
In short, Boyle doesn’t seem to be the ideal candidate for a 40% discount. So what gives?
The answer: AI.
THE PROBLEM: The Water Bureau recognizes a lot of customers cannot pay their bills in full. So it has a $10 million customer assistance program, similar to programs that electric and gas utilities offer that subsidize customers who cannot pay. The problem, as the Water Bureau explained to the City Council earlier this year, is that the program, which is means tested (i.e., offered only to cash-strapped customers), regularly falls short of its goal of helping 10,000 customers annually and has done so since its founding in 1995. In fact, the bureau has never given discounts to more than 8,500 customers in a year.
THE SOLUTION: In February, the council approved a $350,000 contract with a vendor to use machine learning—a subset of artificial intelligence—to more effectively distribute discounts to needy customers. The contractor, a company called SERVUS, is running two 90-day pilot programs to test whether its algorithm can accurately identify customers’ ability to pay. Boyle is one of the customers whom the algorithm selected for the first test, which covers one 90-day billing period. It does not mean he will be selected for the second round, or for the long-term discounts that will be offered to customers next year.
The Water Bureau hopes that through the trial periods, SERVUS can identify customers who would qualify for a discount but have not sought one in the past. “With a randomized control trial, we reach a broader, more diverse group of customers, capturing people across different financial situations—those who might not typically apply or feel comfortable sharing income information, says Water Bureau customer service director Quisha Light. “This unbiased, randomized approach gives us a true picture of how the program could work for everyone, not just those who already feel they need help.”
BOYLE’S TAKE: The water-guzzling Columbia executive says any scenario in which a customer of his means is offered a discount is an indication that the Water Bureau needs better management. “There’s an irony of me being a water hog and now the bureau offering to give me water,” Boyle says. “I don’t want the discount—they should give it to somebody who needs it.”