Prepaid Energy

Prepay Energy Working Group

Prepay energy, a voluntary service, requires a customer to pay before using electric service. This simple payment option creates a paradigm shift for the utility industry which has relied on a post-pay model for decades. The Prepay Energy Working Group is a unique group of industry professionals focused on state-of-the-art policies and practices.

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Members of the Prepay Energy Working Group include representative from utilities, energy retailers, regulators, consumer advocates, and metering and software vendors. Currently in its sixth year, the Prepay Energy Working Group conducts research around both the challenges and opportunities presented by prepaid service focusing on four tracks:

  • Regulatory issues
  • Consumer/market research
  • Potential for an energy conservation impact
  • Operational requirements or the business side

While still a nascent offering in most of North America, prepay electric service shows promise to increase customer satisfaction, reduce energy use, reduce bad debt and reduce utility cost of service. Our survey research indicates that consumers strongly correlate prepay electricity energy with convenience, increased control and budget management. The ability to use less energy and save money is a driving factor in satisfaction.

Prepay electric service has major potential as both a bill payment and energy management application, both of which are enabled through advanced technologies. Nearly all U.S. energy consumers currently receive a utility bill at the end of the month, with no real or temporal linkage between consumptive behavior and cost.

When enabled by smart grid, prepay electric service is a platform for energy management and pricing options. There can be a daily bill-pay conversation that is transactional (focused on dollars and cents), relevant (focused on energy savings and bill management), and actionable (today’s information can effect tomorrow’s conversation). With a consistent feedback loop, customers become aware of dollars-of-daily-usage in close-to-real time.

Benefits in support of a prepay electric service business case must be balanced against legitimate consumer protection concerns.  Prepay electric service is exposing tensions between the existing regulatory policies and new opportunities enabled by advanced technologies.

Contact

Jamie Wimberly, CEO, jwimberly@defgllc.com, 202-255-2860.

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