Peninsula Light Company’s smart prepaid electric program

  • United States member-owned electric co-operative located in Gig Harbor, WA
  • Second-largest co-operative in the Northwest, serving over 31,000 meters in a service territory of 112 square miles
  • Smart meter prepay program is enabled by SmartGridCIS’s prepaid billing/CIS solution
  • 78% of outstanding debt recovered from customers enrolled on the program

Peninsula Light CompanyGrowing numbers of investor-owned utility companies and co-operatives in the United States are for the first time introducing electricity prepayment programmes as one of the benefits delivered by their smart metering roll-outs. Among the country’s smart meter prepayment service pioneers is the Peninsula Light Company (PenLight), the second-largest co-operative in the Northwest.

Debts quickly recovered

PenLight started introducing smart meter based prepayment service in 2012, as it wanted an alternative payment option for electricity consumers who couldn’t afford a security deposit or the late-payment and reconnection fees associated with traditional postpaid billing.

PLC_Prepay_LogoFollowing a pilot, PenLight launched a smart prepay program for members who had fallen behind on their bills. Twenty-five cents of each dollar that customers credit to their prepay account goes towards clearing their debt. In less than two years, the utility has recovered 78% of the outstanding debt of the customers enrolled on the program.

Customers proactively control usage

Not only are debt levels continuing to fall, but there are ongoing benefits too, as the customers on the program are no longer in a situation where they can have an outstanding balance or accumulate debt due to late payment or reconnection fees. “Eliminating these collection fees helps to prevent the consumer falling into a negative feedback loop that is difficult to recover from,” explained Jonathan White, PenLight’s Director of Member Services & Marketing.

The smart prepay program is designed to help consumers to proactively manage their power usage and take steps to avoid the risk of disconnection. Instead of thinking about their consumption only when a monthly postpaid bill arrives, consumers can view daily usage in terms of kilowatt hours and dollars spent and change their behaviour based on how much energy they are using.

“The trade-off is that customers are now fully managing their account and energy usage,” said White. If their account goes negative, then the meter is shut off from the office without dispatching a meter technician. Power is restored automatically 24/7 when customers top up via any of the available payment channels (online, rep assisted and IVR).

Even without aggressively advertising  the prepay programme, PenLight is seeing a gradual rise in the number of smart prepay customers. New enrolments are coming mainly from consumers that have been disconnected and cannot afford the reconnection fee and a security deposit. Over time, White expects prepayment to broaden in appeal to consumers that want an alternative payment option but aren’t credit-challenged, though that isn’t PenLight’s present focus.