Prepay for Energy and Utility Service

I pay for gasoline before I drive. Shouldn’t I pay for electricity before I use an appliance?

Some electric industry observers argue that “prepay” could be one of the first real fruits of the smart grid. The value of investments in advanced meters and smart grid is not readily apparent to us. A twenty-first century grid will allow the transmission and distribution utility to monitor bottlenecks, anticipate problems, and resolve outages more quickly. But that value may be hard to see — or at least it will not be visible until the next major storm. But we pay a power bill every month, so a change in that transaction is readily visible.

Today, there is no timely linkage between consumption and the size of the bill. We hear about the electric rate, but our understanding of the drivers of consumption is limited. Prepaying for energy — much like filling the gas tank — allows us to directly associate cost with usage. As we monitor usage, we can consider energy management (is it time for a tune up?) or investments (should my next car get more miles per gallon?). Prepayment of electricity or natural gas should leverage the real-time information coming from advanced meters, and that information should allow consumers to change consumption patterns to fit within a monthly budget. 

Last month, DEFG released the results of an online survey of industry professionals. The respondents considered questions on the application of prepay to the energy industry. Read the press release.

Now the results of an EcoPinion survey are available. We surveyed 1,000 Americans nationwide in mid-November 2010. The report examines customer perceptions and expectations regarding a prepay transaction offered voluntarily to consumers by the local utility. The report is available on our website.

Stories about the EcoPinion survey report:

What are your experiences with prepay?

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