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MLGW News Release
Smart Talk: Helping our most vulnerable customers
June 26, 2013

Memphis has a poverty rate of 26 percent. Imagine if nearly half of those impoverished residents took advantage of options to lower costs associated with their utility bills. No security deposits. No reconnection fees. The ability to pay in advance.

Smart meters provide that kind of flexibility. MLGW plans to implement a “pay as you go” option that allows customers to pay their utility bill much like their cell phone bill – in advance. Prepay lowers the risk for MLGW, which in turns means that security deposits would be eliminated.

With no security deposit, that’s $150 less to start new service. That’s $150 more for other household needs.

In fact, if 50 percent of Memphis’s impoverished were to take advantage of prepay, the potential savings would be $2.025 million.

MLGW connects about 100,000 customers a year for $54 (same-day service) or $44 (next-day service). With smart meters, that fee will be reduced to $25.21.

Again, using Memphis’ poverty rate and assuming conservatively that 27,000 customers pay for next-day service, that’s a collective savings of more than $500,000 annually.

Smart meters also enable MLGW to streamline the process for reconnections after a cutoff.

Right now, MLGW disconnects approximately 100,000 residential customers for failure to pay. An estimated 70,000 customers will reconnect and pay the $25 reconnect fee the next day. Of the 100,000 whose utilities are turned off, 20,000 will have their power off for two or more days.

The new fee would be $11.44 for reconnects. If we assume the 20,000 group are impoverished, the potential reconnect savings is about $228,000 per year. But that’s not all. Since service can be restored remotely, that means customers won’t have to wait as long to get reconnected – within minutes, not hours.

That brings us back to “pay-as-you-go.” Prepay customers won’t have to wait for a bill. When their balances get low, customers will be notified.

At any time, prepay customers will be able to pay for their service and keep on going.

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