Customers who enroll in prepay electric service reduce their energy usage from 5.5 to 14 percent as a result of changes in behavior due to more real-time information and awareness around their energy usage, according to a study conducted by Distributed Energy Financial Group (DEFG). Three out of four customers who were part of the study indicated they had changed their electric usage behavior to lower their electric bill since switching to prepay. In addition, the study indicated that customers had high levels of satisfaction with their prepay service as 92 percent of the surveyed customers indicated they were “very satisfied” or “somewhat satisfied” with their prepay service.
“The findings from the prepay study indicate that customers change behavior as a result of voluntarily switching to a prepay electric service. Customers become more proactive in looking for ways to reduce their energy usage and lower their electric bill,” said Darren Brady, DEFG’s executive vice president. “Prepay service can enhance the relationship between the utility and its customers by not only making the payment process more convenient, but by providing real-time information to the customer about their daily cost which is changing how they think about and manage their electricity.”
The study included two cooperatives that offer prepay electric service in the Northwest and was undertaken to better understand the potential conservation impacts that can result from prepayment of electricity service. “We participated in this study to learn more about how our members view our prepay offering, and to better understand how our members manage their electricity usage while on the prepay service,” said Virginia Harman, manager for Glacier Electric Cooperative.
The study evaluated the usage data from 1,394 customers enrolled in prepay programs to identify potential energy savings impacts from participation, and also asked the same participating customers about their experiences related to the prepay electric service. The customer survey was conducted in the fall of 2013, and included a total of 112 respondents.
“The results from the study confirmed what we have seen in our recent prepay savings study and national consumer surveys conducted through our Prepay Energy Working Group,” said Darren Brady, “Customers enrolled in voluntary prepay programs on average are reducing their energy usage at a very meaningful level, higher than most traditional energy conservation measures. While at the same time prepay services are generating high satisfaction levels from customers across all income levels, helping utilities enhance the value of a traditional payment transaction with their customer base.”
The study asked questions related to the actions customers had taken since enrolling in a prepay service. The goal was to try and better understand customer behavior and the specific steps that customers may take to reduce their energy usage as a result of prepayment.
“Overall, the results from this study indicate that prepay brings greater awareness of energy usage to the customer, encouraging them to take both basic actions—such as turning off the lights and turning down the thermostat—to making investments in energy efficient lighting, insulation, and HVAC systems,” said Darren Brady. “Customers indicated they switched to prepay to have greater control over their energy usage and bill, as well enabling better budgeting of energy costs and allocation of available funds to pay for electricity.”
DEFG is a management consulting firm specializing in energy.