SmartSynch Inc. (Jackson, Mississippi, U.S.) and Exceleron Software Inc. (Dallas, Texas, U.S.) have teamed up to create an integrated platform that enables utilities to leverage two-way automated metering infrastructure (AMI) technology to initiate spot deployments of a prepay program for customers. The program, as being rolled out by electric utilities, is voluntary. “As soon as someone seems to feel that prepaid is some type of punishment or a negative thing, the prepay program pretty much dies on the vine,” said Craig Hutson, CTO of Exceleron.

Bob Crenshaw, CEO of Exceleron, says that the utilities currently using the prepay program believe that 5% to 10% of their residential customer base is a realistic target for prepaid services. Oklahoma Electric Cooperative implemented its prepay program in 2006, and it already has 4% penetration among its residential customers, and the utility believes that number will grow to 10% and maybe even beyond. Furthermore, the utility has seen a 12% decrease in energy consumption among its participating customers, according to Charles Barton, the utility's manager of finance.

Exceleron's Hutson believes such conservation is being driven more by economic reasons rather than environmental ones. “I don't believe that prepaid customers are worried about their carbon footprint; they are more concerned about making those last few dollars last until they can put some money in their account,” he explained.

Customers scale back their electricity usage because they're better able to track it in the prepay program where they receive access to daily usage, for example, as opposed to the standard monthly billing information. Exceleron presents prepay customers with straightforward billing information by breaking the electricity usage down in an easy-to-understand format.

There is a customer fee to participate in the prepaid program. However, Hutson pointed out that once customers enter the program, oftentimes they make lifestyle changes that reduce the amount of electricity they consume, and therefore lower their bills. “If you look over their past history, they often paid much more in late fees, disconnect/reconnect fees and additional deposits over the previous year, so they end up saving money in the long run even though they may be paying the same per kilowatt-hour rate,” Hutson said.

Furthermore, with the prepay program, utilities usually don't require a deposit or charge a disconnect/reconnect fee. “With the new GE Remote disconnect switch that the SmartSynch SmartMeter supports via the public infrastructure network, we are able to allow the utility to remotely connect/disconnect a customer without any human intervention,” said Exceleron's Crenshaw.

When a prepay customer moves, oftentimes utilities leave the AMI meter in place. “It is certainly up to the utility how they manage their meter inventory,” said Henry Jones, CTO of SmartSynch. “But most likely the cost difference between a standard meter and this meter is not substantial enough to warrant that change-out process.”