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Utility Insiders Say Prepay Could Save Energy, But Not Interested Themselves

If utility providers were able to offer a prepay option to customers, then such “real-time” consumer awareness of consumption and cost could lead to lower energy use, a scenario that more than half of industry insiders, 54%, could envision if a prepay utility plan were rolled out, according recent results from the “DEFG Prepay Industry Survey Summary.”

The survey, conducted by management consulting firm DEFG, collected insights from about 600 industry stakeholders, and concluded that “participating consumers may reduce their usage — through better energy management and investments in energy efficiency — by about 15%.”

The problem is, few of the industry insiders, when asked to think as consumers, are excited in such programs. In fact, over 50% said they would be “not at all interested” if a local utility offered them a prepay option.

However, their researchers called utility pre-pay the “killer app” of the smart grid, with 17% of the respondents pointing to smart grid deployment as the key driver in the industry.

Other benefits on the industry side were risk-management gains that the plans could offer energy suppliers. “Most of the open responses emphasized the benefits of prepay to revenue (collections, cash flow, etc.) and risk management (bad debt management, credit risk, etc.) at the utility,” according to the DEFG study.

The report concluded that a prepay utility plan may attract about 10% of the customer base as the preferred method of payment.  Another 25% of respondents estimate that customers would be interested in the potential for a discount to service plans, if they opted to pay in advance. 17% of respondents agreed that consumers would see a benefit to prepay if the security deposit requirement was lifted and/ or other fees associated with traditional service avoided while 14% of respondents that that the key benefit would be a consumer preference for increased budget control.

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