Premature replacement costs for electricity prepayment meters


The UK energy regulator Ofgem has set out a methodology for calculating the stranding costs of electricity prepayment meters.

The methodology is based on a net book value approach, using the modern equivalent asset value (MEAP) of the relevant prepayment meter, depreciated on a straight line basis over the economic life of the meter (ELA).

The basis for the methodology is the potential changeout by electricity suppliers of older more expensive prepayment meters with newer improved meters in a price controlled environment, and the question of how the costs of the replacement should be borne.