Smart Prepaid Utilities in the United States: Forecasts & Analysis

Prepaid electric service is set for strong growth in the United States over the next five years. We forecast that by 2021 there could be between 2.62 million and 2.86 million households using a smart meter based prepaid electric service, depending on how regulation for this new payment option evolves.

The early experience of utilites with AMI prepayment suggests that there can benefits for consumers and utilities alike. For householders, these include better control over energy usage, reduced consumption, bill savings, and increased customer satisfaction, while utilities can experience improved collection and debt levels, operational efficiency, and front-line staff morale.

These potential benefits are attracting the growing interest of the investor-owned utilities (IOUs), in addition to the early-adopting electric cooperatives and public power companies. However, the IOUs must overcome regulatory hurdles before they can launch prepaid pilots and services. Consumer advocates continue to raise concerns about some aspects of prepaid service, such as remote disconnection, and while the public utility commissions appear increasingly open to requests for prepaid pilots, the regulatory situation remains challenging and to some degree uncertain.

Smart Prepaid Utilities in the United States: Forecasts & Analysis sheds light on the opportunity for utilities as they prepare for prepaid pilots and service launches. The report provides a comprehensive review of market developments and regulation, insights into prepay program design, as well as consumer adoption forecasts for the next five years. It also examines the vendor landscape for smart prepayment back-office solutions.

Questions answered

• What are the potential benefits of a smart meter based prepaid electric service for consumers and utilities?
• How is regulation for AMI prepaid service evolving in light of the consumer protection issues raised by advocates?
• How can utilities develop prepay programs that build in customer centricity by design?
• How quickly are consumers adopting this new payment option and how many prepaid users will there be by 2021?
• Who are the leading suppliers of smart prepayment back-office solutions and how do their offerings compare?

Forecasts & data

• Residential electric meters, 2017-2021
• Addressable AMI meters, 2017-2021, for two alternative adoption scenarios and three utility types (IOUs, cooperatives, public power companies)
• Consumer adoption of prepaid electric service, 2017-2021, by scenario and utility type
• Energy efficiency impacts of AMI prepayment, including aggregated savings in energy consumption, household bills, power plants needed, and CO2 emissions.

Who should buy this report?

• Investor-owned utilities, electric cooperatives and public power utilities
• Utility billing / CIS vendors and smart prepayment solutions providers
• Advanced metering infrastructure suppliers
• Payments & kiosks service providers
• Public utility commissions
• Consumer advocacy organizations
• Financial services companies & investors

Table of Contents

0 Executive summary

• 0.1 Prepaid adoption forecasts
• 0.2 Vendor landscape for smart prepayment solutions

1 Introduction

• 1.1 Thick versus thin prepayment
• 1.2 AMI as a driver for prepaid electric service
• 1.3 Report roadmap

2 The emergence of AMI prepay

• 2.1 Market status
• 2.2 Benefits for utilities and consumers
• 2.3 Consumer protection issues and regulation

3 Program design considerations

• 3.1 Program names
• 3.2 Upfront costs
• 3.3 Program participation fees
• 3.4 Debt recovery
• 3.5 Account management and communications
• 3.6 Payment channels
• 3.7 Transaction fees and minimum values
• 3.8 Disconnection and reconnection
• 3.9 Resuming credit service
• 3.10 Alternatives to disconnection

4 Forecasts for consumer adoption

• 4.1 Forecast methodology
• 4.2 Addressable population of advanced meters
• 4.3 Consumer adoption forecasts
• 4.4 Energy conservation impact of AMI prepay

5 Smart prepayment software landscape

• 5.1 Our selection of vendors
• 5.2 CIS or adjunct solution?
• 5.3 Conclusions

6 Key findings

7 Recommendations for utilities

Annex A: Vendor profiles

• A.1 Daffron & Associates
• A.2 Ericsson
• A.3 Exceleron Software
• A.4 National Information Solutions Cooperative (NISC)
• A.5 Oracle
• A.6 PayGo
• A.7 Professional Computer Systems (PCS)
• A.8 SAP
• A.9 Siemens
• A.10 SmartGridCIS