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MLGW News Release
Smart Talk: Prepay offers savings, freedom
November 18, 2014

In February 2015, prepay service will be available to current smart meter customers. The new service, only made possible through the automation smart meters afford, will allow customers the flexibility to pay how much and how often they want for utilities. This freedom could make a huge difference for weekly wage-earners who instead of making one large monthly payment could make smaller, more frequent payments. However, it’s the significant savings prepay can potentially offer that may give MLGW’s poorest customers the greatest relief.

The potential savings are estimated at about $7.9 million on electric bills annually if our prepayment option mirrors the conservation success seen with program in Phoenix, Arizona.

The Phoenix area is the service territory of The Salt River Project (SRP), which has offered pre-pay since 1993. A 2010 study showed that SRP’s 100,000 prepay customers shaved 12 percent off their electric costs simply because their increased awareness resulted in behavior changes which reduced their usage.

If only half of Memphis’s impoverished enrolled in prepay and achieved that 12 percent annual savings on their electric bill, they would save $7.9 million each year. Add an additional $2.025 million in savings for customers because prepay would eliminate the $150 security deposit that’s required after a disconnection.

Prepay also eliminates the surprise that customers receive each month when opening their utility bill. How? Because through prepay, they would know how much energy is being consumed as they use it – much like the gas gauge in your car.

Much like that car gas gauge, when a customer’s balance gets low, they’ll be notified. Customers will have the control to pay whatever they can afford for services – whether it’s a dollar, $20 or whatever — whenever they need. No more monthly billing cycle! (If the customer requests a bill, we can still send one.)

This is an unprecedented amount of control and flexibility for MLGW customers. There’s going to be a period of adjustment where customers worry about finding themselves in cutoff situations. MLGW is committed to working with community organizations to empower those who need assistance and ensuring that customers get the most out of prepay – and their household budgets.

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