Prepaid electrical bills have reduced energy consumption and put consumers in control of their payment schedules, contends Charles Barton, manager of finance for the Oklahoma Electric Cooperative Inc.

"It went from those customers calling in and being upset with us because they couldn't pay their bills or being upset because their bills are high to them being in control of their bills," Barton says.

The cooperative, which is based in Norman, Okla., considered using prepaid cards with readers at customers' homes but decided the prepaid card systems already in use do not always work, Barton said.

Instead, the cooperative works with Exceleron Software and SmartSynch Inc. to offer wireless prepaid accounts to electricity customers.

Exceleron and SmartSynch announced June 16 they had signed an agreement to work together to help utility companies offer prepaid utility payments using wireless technology.

SmartSynch, based in Jackson, Miss., provides a wireless transmitter that utilities can install in meters at consumers' homes. Dallas-based Exceleron offers software that works with a utility's billing system to measure how much power consumers use and deduct its value from a prepaid account, Jeff Severs, Exceleron chief operating officer, tells Prepaid Trends.

"We have developed a platform that fits in between a utility's billing platform and the utility's automatic-meter information," Severs says.

SmartSynch enables utilities to install a device on meters that uses wireless phone networks to send information about consumers' electricity use back to the utility, so the companies could offer prepaid services to consumers without installing new meters, says Chris Meyers, a SmartSynch spokesperson.

"It's basically like putting a Blackberry inside a meter," Meyers says.
The Exceleron software works with utility meters that communicate automatically with the company as opposed to meters that require visits from meter readers, Severs says.

The software can work with the standard billing systems utilities use or with prepaid cards, Severs says.

The cooperative elected not to use cards because it saw too many problems with selling the cards through kiosks and getting in-home readers to work, but it liked the concept of prepaid billing, Barton says.

"When Exceleron came in and said, 'We can do it. You can utilize your own payment method with no cards,' we liked that," Barton says.

The cooperative has 1,600 prepaid customers, he says.

The cooperative found that electricity use declined by 12% year over year for customers who used the prepaid system, Barton says. He says the company compared electricity use in May and October, which have no large temperature swings, to determine base use.

Concerns over energy conservation may lead more customers, even those who do not have problems paying their bills, to adopt prepaid billing, Barton says.

"We really think energy conservation is going to be a huge deal in the future," Barton says. "If people know what they use on a daily basis, they will become more energy conscious."

Cooperative customers, both prepaid and postpaid, can monitor their electricity use on a dedicated Web site, Barton says. That helps them budget their use.

Consumers sign up to prepay for electricity with the utility, and the Exceleron software measures the use and bills the prepaid account, Severs says.

Consumers can make payments on the Internet, at one of 15 kiosks in the utility's service area or over the phone, Barton says. Customers who have their power cut off can have it restored in 15 to 30 minutes, he says. That saves them the embarrassment of having a meter removed, and it saves them from paying deposits for service or having to get a meter reinstalled, he says. Prepaid customers also do not need to pay a disconnection or reconnection fee.

Customer-service calls have decreased as well, Barton says, though he could not quantify the change. Customers who used to receive bills at the end of the month worried the entire month about how they would pay their bills and did not always understand why their bills were so high, he says.

When they prepay for their electricity, they have a better understanding of their energy costs, which was a benefit the utility did not expect, Barton says.

"When it was $300 they couldn't grasp the concept that they could control what they do with that bill," Barton says. "Now if they use $10 of electricity in a day, they remember, 'I used the dryer last night' or 'It was cold.'"

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry