Research shows how prepaid electricity affects consumption

Many utilities internationally have taken to integrating prepaid electricity service into their operations, but few in the U.S. have shown an interest in prepay services for their customers. San Diego Gas & Electric proposed a prepay program to the California Public Utilities Commission and was recently shot down by the regulator.

But new research demonstrating how prepayment services affect energy consumption could make these programs more attractive to utilities and regulators alike.

The Prepay Energy Working Group, launched by management consulting firm DEFG in 2010, has worked with Oklahoma Electric Cooperative to determine the relationship between participation in prepayment programs and energy consumption.

The analysis uncovered compelling results surrounding the potential for prepaid services to impact energy conservation and consumption.

“The major finding is that participation in prepaid energy service results in an average reduction in energy usage of 11 percent,” said Cindy O’Dwyer, vice president 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.”

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