DEFG report confirms prepaid energy leads to significant drop in energy consumption

Washington, DC … DEFG, a management consulting firm specializing in energy, worked with an economist, Oklahoma Electric Cooperative, and an array of market participants and public stakeholders through the Prepay Energy Working Group to conduct a statistical analysis of the relationship between participation in prepayment and energy consumption.

Launched by DEFG in 2010, the Prepay Energy Working Group explores the many critical issues presented by prepaid electricity service. Arguably, the most compelling area of study is the potential for an energy conservation impact. Using consumer data obtained from Oklahoma Electric Cooperative, economist Michael Ozog, PhD, applied techniques widely accepted in the evaluation of utility-sponsored energy efficiency programs to measure the effect of prepayment on energy usage.

“The major finding is that participation in prepaid energy service results in an average reduction in energy usage of 11%,” stated Cindy O’Dwyer, VP of DEFG and lead for the Prepay Energy Working Group. “Relative to other common energy efficiency measures, 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.

“This study supports the notion that regular communication providing timely data where usage is tied to dollars and cents is key to a shift in consumer energy consumption,” stated Jamie Wimberly, CEO of DEFG. “Prepaid service operates as a consumer platform for both energy and budget management.”

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.

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