In 2011, DEFG’s Prepay Energy Working Group hired an econometrician to explore the potential linkage between prepaid energy and reduced energy usage.  Subsequent work applied the methodology to monthly billing data from the members of Oklahoma Electric Cooperative who opted into prepaid electric service and found average customer savings of 11%.

This white paper, “How Do Prepay Electricity Programs Impact Consumer Behavior?,” reviews the modeling framework proposed in the previous white papers and discusses how it might be expanded to address additional research questions. For example, the author suggests that various econometric models might be used depending on whether the analyst is using monthly whole-house data, advanced meter data with small time intervals or data disaggregated by end-use (air conditioning, laundry, cooking, etc.). The white paper concludes that a formal meta-analysis could be conducted to combine the results from numerous studies and identify patterns and relationships among the results from studies of programs with slightly different features in different regions.

There is a growing recognition that consumer behavior is very important if we are to achieve significant energy efficiency goals. If alternative tariffs, rate designs and billing and payment approaches result in significant changes in energy usage by consumers, then it is merely a matter of time before they take their place alongside traditional, equipment-based, demand-side management programs in a portfolio of energy-savings approaches. Integration of these approaches will remain important to their success. Determining the impacts of alternative practices will become important in making strategic decisions about how to intereact with retail customers.

The importance of “How Do Prepay Electricity Programs Impact Consumer Behavior?” is the manner in which it systematically sets forth the statistical methods that will be required to assess consumer behavior and incorporate the impacts into long-term planning. Read the summary, then contact a DEFG partner to get a copy of the paper.

Filed Under: Conservation, Prepaid