Prepaid energy leads to 11% drop in energy consumption, report finds


Washington, DC, U.S.A. — (METERING.COM) — March 22, 2013 – A new report from energy management consulting firm DEFG has found that prepay energy customers at Oklahoma Electric Cooperative have reduced their energy usage by an average 11 percent.

Based on an average monthly bill for Oklahoma Electric Cooperative customers of $146, this implies a $192 annual reduction in a customer’s energy bill.

The report, which was prepared for DEFG’s Prepay Energy Working Group by economist Michel Ozog of Integral Analytics, used monthly consumption data for 1,217 households, with an average of 32 months under post-pay and 22 months under prepay, with the latest date being March 2012.

Oklahoma Electric Cooperative launched its prepay service in 2006 and utilizes Exceleron Software’s patented Prepaid Account Management System (PAMS). PAMS is integrated with the company’s existing advanced metering infrastructure (AMI), meter data management (MDM) and customer information system (CIS) platforms. Every customer, including the prepaid customers, has a smart meter installed.

The 11 percent energy use reduction is quite large relative to other common energy efficiency measures, the report points out, particularly as no upfront financial outlay is required on the part of the customer. Furthermore, it is attributable to reductions in usage while service is connected and is not a consequence of service disconnection.

“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,” commented Jamie Wimberly, CEO of DEFG. “Prepaid service operates as a consumer platform for both energy and budget management.”

Other findings were that the level of disconnects is driven by usage and not by deprivation, with the higher the number of disconnections each month, the higher the usage is for the customer. However, further research is needed on the relationship between usage and disconnection, e.g. on what actions customers take to save energy/dollars, and the “cost” to the household to achieve such savings?

It is also proposed that the potential of time-based pricing should be explored. With regular communications providing actionable information resulting in a material customer response and shift in usage behavior, how might time-based pricing complement the prepay model to result in additional savings?

Another recent study from DEFG found that 38 percent of Americans are interested in prepaid electricity, with younger adults, renters, and males being most open to the new service. The top two reasons are to reduce energy use and monitor closely, and increased control over energy costs and budget.