Pre-paid Metering: AMI's Killer App

Sponsored by

By Tammy Zucco, Tantalus

People around the world routinely pay for goods and services in advance. From credit cards to phones to public transit, "prepay" is a part of many people's lives. As utilities and customers in more than 40 countries experience prepay's advantages, the concept has started to blossom in North America. Since utility prepay requires advanced metering infrastructure (AMI), some observers predict that prepaid functionality, which offers clear benefits to utility customers and managers, could be the "killer app" that launches AMI to ubiquity.

Prepaid electricity plans result in satisfied customers and reduced electrical loads. Consumers utilizing prepay use up to 20 percent less energy than those on traditional "postpay" billing cycles, and utilities using prepay consistently report customer satisfaction ratings above 85 percent. According to a recent Chartwell report on prepaid metering, prepay minimizes the adversarial nature of customers' relationships with the utility.

PayGo, a provider of real-time, prepaid electric systems, can spell out prepay's benefits. (This author's company, Tantalus, partners with PayGo to provide prepaid functionality to its customers.) Based on PayGo's real-world experience, prepaid service is popular because it makes utility financial managers happy. Prepay increases revenue and cash flow, eliminates bad debt and pays for itself quickly with a typical one-year payback timeline. Prepaid services also reduce truck rolls, high call-center volumes, problems with customer property access and customer service representative stress. Additionally, prepaid service enables 24-hour automated payments, quick access to current readings and mediated, remote disconnect—all applications that increase a utility's business efficiency. All of these benefits lead to the high customer satisfaction ratings cited above, and few customers return to "postpay" after utilizing prepay.

The best prepay systems are built for flexibility. Once enrolled in prepay, a customer can log into and manage his account through a website, which can increase customer engagement in efficiency and other programs. In addition, customers can pay in more than a dozen ways, including in-person kiosks at popular retail locations or via cell phone text messaging. Remote disconnect capability allows service to be stopped quickly, yet easily resumed within 60 seconds of payment. Utilities do not take disconnection lightly. The best prepay systems, therefore, offer a variety of choices to prevent disconnection if the utility deems disconnection inappropriate.

Utilities moving to prepay face a few notable challenges. First among them is converting existing "postpay" customers to a prepay relationship. Oklahoma Electric Coop. (OEC), which serves more than 49,000 customers, is in its fifth year of offering customers prepaid electricity. Its experience provides valuable takeaways about prepay rollouts. A prepay program can take time to gain momentum, but once a tipping point is reached, customer acceptance can skyrocket. After two years of beign offered prepay, less than 1,000 OEC customers had signed up for the program. After three years of word-of-mouth marketing, however, OEC now boasts 5,000 participants and growing.

Studies show that prepay adoption rates rise quickly once a community accepts it; this threshold can range from 10 to 20 percent penetration. Prepay's adoption curve also can influence AMI adoption. As prepay comes into its own, we might be witnessing the birth of a smart grid "killer app."

Tammy Zucco is Tantalus' chief marketing officer.

More PowerGrid International Issue Articles
PowerGrid International Articles Archives
View Power Generation Articles on PennEnergy.com

Sponsored by
CURRENT ARTICLES

Tucson Electric Power transmission line to strengthen electric service

05/22/2015

More than half of the line’s about 180 steel poles — each 150 to 190 feet tall — have been installed 

Electric cooperatives ranked highly on customer satisfaction

05/22/2015

Across all 43 industries measured by the ACSI, electric co-ops have the 10th highest customer satisfaction score

Ohio EPA permits expansion of natural gas power plant

05/22/2015 Plans call for converting Rolling Hills Generating Station, in operation since 2003, to a 1,414 MW natural gas-fueled comb...

ON DEMAND WEBCASTS

Solar + Storage: Capturing Opportunities and Overcoming Challenges

The convergence of solar and energy storage applications is under way. The combined application o...

Storage Enters the Global Stage: What’s the value proposition for your region?

For electricity storage, the events of the last two years have shown that the skepticism around t...

How to deploy mobile forms + devices to speed up field service processes & reporting

Overcoming the pain points associated with any process is much simpler and more cost effective th...

Beyond Integration: Three Dynamics Reshaping Renewables and the Grid

In a unique industry research initiative, DNV GL gathered views from over 1,600 energy sector par...

Engaging the Small and Mid-sized Business (SMB) Marketplace

This session will outline how Duke Energy leveraged Voice of Customer insights, previous experien...

INDUSTRY STOCKS

EL&P BUYER'S GUIDE PRODUCTS

Nuclear Horizontal Modular Storage (NUHOMS®)

AREVA TN’s NRC-licensed NUHOMS® system ensures the highest safety and lowest dose performance. With no tipping, tripping and sliding, you have the...

Cavitation Peening

AREVA developed its innovative solution for asset management, significantly extending the life of reactor components. Cavitation Peening is a perma...

Decontamination & Decommissioning

Decommissioning strategy development, cost estimates, plant modifications; system and building decontamination; RV segmentation; large component re...

AREVA’s Stearns Roger® Services

AREVA can assess, upgrade or replace Manipulator Cranes, Spent Fuel Bridges and Fuel Transfer Systems to ensure total reliability and optimal perfo...

POWERGRID PRODUCT LISTINGS

EtherMate® Industrial Ethernet - IO Modules

LioN-M ProfiNet device with 16 digital I/O channels, channels can be used universally as inputs or outputs, M12 socket, ro...

Low-Smoke Zero Halogen Premise Distribution Cable

AFL’s Low-Smoke Zero Halogen (LSZH) distribution cable offers all of the benefits of a traditional 900 µm based optical ca...

OFL280 FlexTester - Handheld OTDR

AFL's OFL280 FlexTester offers an unmatched combination of fiber test functions, ease-of-use, portability, and value.

TRM® 2.0 - Test Results Manager PC Analysis and Reporting

Test Results Manager 2.0 (TRM® 2.0) is an all-in-one analysis, viewer and reporting tool designed for use with NOYES fiber...

FEATURED ENERGY JOBS

View more Job Listings >>

POWERGRID International

March 2015
Volume 20, Issue 3
1503PG-cover

ELECTRIC LIGHT & POWER

January 2015
Volume 93, Issue 1
1501elp-cover