Power Prepayment Gets Good Reviews in Phoenix Area
Aug 20 - Las Vegas Review - Journal
By JOHN G. EDWARDS
Nevada Power Co. won regulatory approval Wednesday for a trial program that
would allow consumers to prepay electric bills.
While consumer advocates expressed concern about the program, Salt River
Project, a municipal utility serving part of the Phoenix area, said some of its
customers love a similar program.
"It's been a complete success," John Willis, Salt River's manager
of project management analysis, said. "People really enjoy this, and they
don't want to get off of it."
About 31,000 residential customers are signed up for Salt River's M-Power
prepayment program. That's the largest number at any electric utility in the
country, said Jeff Lane, a spokesman.
Salt River Project first offered a prepayment program, then known as Pay As
You Go, in 1993. The equipment at that time had to be hard- wired to existing
meters, he said.
Newer systems use a meter that plugs into a electrical socket. A plastic card
the size of a credit card can be taken to 51 different automated machines around
the Phoenix area. Many are in supermarkets, and some can be used 24 hours a day,
Willis said.
A customer purchases a certain amount of power that is stored on the card.
Back at the resident's home, the card is swiped in a meter, which displays how
much power the customer has prepurchased, how much electricity is being used at
the moment and how much power has been used over recent periods, such as the
month to date, Willis said.
Some customers pay as much as $1,000 in advance as a way of avoiding monthly
bills. But the program also works well for people who don't have checking
accounts, aren't good at budgeting or have low income, he said.
If the customer is running short of money, he or she can get three hours of
air conditioning for as little as $1, Willis said.
A light and alarm go off when the customer has four days of electricity left,
he said.
If customers use all their prepaid power and their electricity shuts off,
they can recharge their card and restart their power. With the prepaid system,
customers don't need to pay the $40 to $60 reconnection fees as they would if
they were paying traditional monthly bills.
Customers with problems paying their electric bills are offered an
opportunity to sign up for M-Power when they come to Salt River project, Willis
said.
Nevertheless, signing up for the program is voluntary, and Salt River will
direct customers to social service agencies and help them set a debt repayment
program if necessary, he said.
"There's a lot of other opportunities for customers that find themselves
having a tough time," Willis said.
Willis said he studied the energy consumption patterns for people in the
M-Power program and concluded they typically reduce power consumption by 10 to
15 percent in the winter and summer.
Nevada Power's prepayment program will be started on a pilot basis with 100
customers, half of them utility employees, sometime later this year.
The Public Utilities Commission on Thursday voted 3-0 to approve the
prepayment program for Nevada Power, but the commission told the company its
wants rigorous standards.
Public Utilities Commissioner Carl Linvill the utility needs to come up with
a more scientific way to select the 50 volunteer residential customers. He noted
that since the program is designed to help reduce delinquent residential power
bills, Nevada Power needs to carefully select volunteers matching that
characteristic.
At Linvill's suggestion, PUC Chairman Don Soderberg changed a proposed order
to require Nevada Power to consult with the PUC staff and the Attorney General's
Bureau of Consumer Protection before expanding the pilot program to help
conserve energy.
Energy conservation is a secondary reason for the prepayment program, and
Linvill said Nevada Power needs to study combining the prepayment program with
time-of-use rates.
Time-of-use rates are higher during peak periods of power consumption, such
as summer afternoons when air conditioning use increases. However, time-of-use
rates are lower at other times and reward customers financially for shifting
some of their power use to off-peak consumption periods.
Some critics are concerned the program may have negative effects on
low-income customers and worry that Nevada Power may try to make it mandatory
for people with bad payment records.
Retiree Dom Citro called the Review-Journal to echo those concerns. The
program is "stupid as far as I'm concerned. The only people that are going
to benefit is the electric company," Citro said.
"What if the gas company does it? What if the telephone company does it?
Then, we'll be financing all of them."