Governments looking to implement such programs often seek advice from Arizona's Salt River Project, a utility company that serves the Phoenix metropolitan area. Since 1993, SRP has operated M-Power, the largest electricity prepayment program in the United States.
According to Jennifer Collins, Analyst at SRP, M-Power is used by approximately 115,000 customers – over 12 percent of all SRP-served residences. Collins said M-Power customers use about 12 percent less electricity than customers on SRP's basic rate plan.
The in-home portion of the M-Power system consists of a meter installed by an electrician, a user display terminal (UDT) that plugs into the wall and communicates wirelessly with the meter, and a closed-loop, chip-enabled prepaid card that SRP terms a "smart card."
For new customers, the cards come preloaded with $30 of energy time that can be immediately inputted onto the meter by inserting the card into the UDT. Users reload the cards via self-service kiosks, called PayCenters, located predominantly in supermarkets in the Phoenix area. Users can load up to $500 onto the cards at any one time, while the meter can hold up to $1,000 of electricity time. The average load value is $20, which nets the average user three to four days of power, Collins said.
SRP processes M-Power payments in-house and contracts with U.K.-based AMPY Metering Ltd. (part of Landis+Gyr UK Ltd.) for the meters and UDTs, while Arizona-based engineering firm AllKiosk, a division of GECO Inc., supplies the PayCenters based on SRP's specifications.
Collins said that, as with any program of such length, M-Power has experienced growing pains. Upheaval with previous hardware vendors exiting the business forced SRP to search for new partners. Also, Collins admitted customers have complained about the PayCenters.
Collins said the problems centered on famously hot Arizona summers that resulted in long lines at the PayCenters to purchase power. "It got to the point where lines were out the door – at grocery stores and our business offices," she noted. "It wasn't pleasant. It wasn't a good experience for customers, nor our partners in the grocery stores or people in the back office trying to figure out how to get these lines down."
When customers reload at PayCenters, the kiosks communicate with two back-office systems, Collins said. SRP engineers have managed to reduce transaction times to a matter of seconds, which has eliminated the long lines, she added.
An October 2010 SRP study, Paying Upfront: A Review of Salt River Project's M-Power Prepaid Program, determined that M-Power customers pay $38 more for electricity annually than users on standard rate plans. But the study also said between 85 percent and 89 percent of M-Power users are satisfied with the service.
Collins said the satisfaction level is high because the program gives users control over their energy usage. The UDT display provides feedback to consumers of usage patterns and beeps when meter time gets low.
The program has been so successful – with an average of 10,000 new customers per year – that SRP hasn't had to market it, as word of mouth has spurred growth, Collins said.
Future generations of M-Power will allow customers to reload cards online and via mobile phones. Collins noted that adding both reload channels will likely take two to three years to implement.
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