Prepaid Electricity, Top Story, Trends, Reports & Analyses

Prepay Eases Summer Bill Shock

By Michael W. Kahn | ECT Staff Writer Published: July 23rd, 2012

As scorching heat breaks temperature records this summer, many jaws are going to drop when electric bills arrive. But not everyone will be in shock. Those who use prepaid metering will be better equipped to weather the weather.

Intercounty Electric Co-op uses this in-home device for its prepaid metering program. (Photo By: Intercounty Electric Co-op)

Intercounty Electric Co-op uses this in-home device for its prepaid metering program. (Photo By: Intercounty Electric Co-op)

“Even for the really efficient, the bill is going to be high, because they’ve used the air conditioning so much. But those with prepay are able to put in $10 or $15 a week, or in a lot of cases $5 every couple of days, and you’re not socked with a big bill at the end of the month,” said Brian Sloboda, senior program manager at NRECA’s Cooperative Research Network.

About 100 co-ops offer prepay. Many began as a way to decrease the number of delinquencies, but got a surprise.

“What ends up happening is that members that have never been delinquent on a bill will call and ask to be put onto a prepaid program,” Sloboda said. “It was never originally intended for those folks. So when you’re looking at your business case you have to look at it beyond those who are delinquent, and how prepay can benefit all of your members.”

What’s the selling point for members who don’t have trouble paying bills?

“It comes down to one very simple thing: control. They want to have more control over their finances,” Sloboda told ECT.coop while discussing CRN’s new Prepaid Metering Analytical Report.

“In surveys around the country—it doesn’t depend upon your type of utility—prepay customers have higher customer satisfaction scores. They’re just happier.”

Sloboda said that in marketing efforts, co-ops should stress that prepay is not a synonym for punishment. But the fact is that prepay helps put many members at ease.

“I’ve talked to a lot of co-ops and one of the things that they hear from low-income consumers, or people who have been delinquent, is that they always lived in fear of the lights just going off, and they always lived in fear of the bucket truck rolling down the street,” Sloboda said.

“And now with prepay they don’t have to live in fear because they know they have $7 left on their account, and they can log into the website, or call the co-op, or look at a text message and know exactly how much energy they have left. And they can start to make some decisions,” he said.

“It ends up being a win-win for both the co-op and the consumers.”

Registered users of cooperative.com may access CRN’s Prepaid Metering Analytical Report by clicking here.

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