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DEFG launched the Prepay Energy Working Group in 2010 to explore the many critical issues presented by prepay service. Arguably, the most compelling area of study is the effect of prepayment on energy conservation and usage. The Prepay Energy Working Group engaged economist Michael Ozog, Ph.D., to apply statistical techniques widely accepted in the evaluation of utility-sponsored energy efficiency programs, to measure the effect of prepayment on energy usage. Consumer billing data obtained from Oklahoma Electric Cooperative provided a rich data set.

Now it is possible to place day-to-day energy and account balance management directly in the palm of the consumer’s hand. Prepaid energy relies on near daily communication and fits squarely with the incremental, anytime-anywhere payments consumers are rapidly growing accustomed to.  Jamie Wimberly, CEO, DEFG

The major finding is that participation in prepaid energy service results in an average reduction in energy usage of 11% according to Cindy O’Dwyer, VP of DEFG and lead for the Prepay Energy Working Group. That is a large number and is achievable without a significant outlay by the customer in equipment. Nothing in the current portfolio really compares to prepaid energy in regard to the size of the impact, speed and cost effectiveness. The 11% decrease, moreover, is attributable to usage reductions while service is connected and is not a consequence of service disruption. With an average monthly bill for Oklahoma Electric Cooperative’s customers running $146.00, the 11% savings implies a $192 annual reduction in a customer’s energy bill.

DEFG is finding that regular communication, providing timely data, where usage is tied to dollars and cents, is key to affecting consumer energy consumption. Jamie Wimberly, CEO of DEFG stated, “Now it is possible to place day-to-day energy and account balance management directly in the palm of the consumer’s hand. Prepaid energy relies on near daily communication and fits squarely with the incremental, anytime-anywhere payments consumers are rapidly growing accustomed to.”

For a copy of the report, please contact Cindy O’Dwyer at: codwyer@defgllc.com or (201) 850-1255.

Read DEFG’s March 20, 2013 press release.

Filed Under: Conservation, Prepaid