Smart Meter Benefits for Low-income Consumers

Michael Giberson

Much of the smart grid promise (and hype) implicitly suggests that the benefits will be scooped up by high-income consumers.  Who else is going to be buying “grid aware” washer-dryer sets with built in wi-fi connectivity integrated into internet-linked home energy managements system?

Still, the benefits won’t be limited to big spenders hoping to manage their energy use a little better.  One example: a new prepaid electric power service product being developed by First Choice Power for offer in areas of Texas with smart meters installed. Prepaid electric service is frequently easier to manage for low-income consumers because it does not require the consumer to make a deposit or pass a credit check.

Prepaid service is already available in the Texas retail power market, but the existing services face several difficulties with standard meters.  Without constant metering and information flows to retailer and consumer, consumers are charged in advance based upon estimated usage — both parties to the service are left with a bit of risk.   The result is a product that is costlier for retailers to offer and more difficult for the consumer to manage.  As one consequence, prepaid service is the subject of significantly more complaints than standard consumer service in the competitive Texas retail power market. (See this earlier post for a related discussion.)

Excerpts from the company press release:

First Choice Power today announced that it has launched a prepaid electricity service called Control First™. The service allows customers to sign up for electricity service with no credit check, no contract and no costly deposit, eliminating barriers to switching as well as providing customers with complete control of their electricity usage and payments.First Choice Power is the first affiliated retail electric provider in Texas to offer residential prepaid service based on actual daily usage from an advanced or “smart” meter, unlike other providers in the market that bill estimated usage.

“Control First is the first prepaid product that really lets customers take control of their electricity costs and manage their usage,” said Brian Hayduk, president of First Choice Power. “This is the next generation of prepaid products giving customers more visibility, more flexibility and more information so that there are no surprises at the end of the month.”

…

“First Choice Power’s Control First is a true prepaid product,” Hayduk said. “With Control First, you decide how much you will pay and when to make your payments. With no minimum payment requirements, you have the flexibility to best manage your budget according to the amount of electricity you use.”

The offer will be made more broadly available later this year as more customers are able to take advantage of the smart meter-based service. There are about 800,000 installed smart meters in Texas, with stated plans by transmission and distribution companies to install an additional 1.6 million in 2010 with more added in subsequent years to total 5.7 million in 2013. Customers must have an advanced meter to be eligible for Control First.

And prepaid is not necessarily just for low-income consumers.  As Lynne discusses in a post on prepaid service, prepaid service can promote consumer awareness and control over energy use and help consumers to reduce energy use.