Smart Talk: Pre Pay

MLGW’s poorest customers in Memphis could potentially save $7.9 million on their electric bills annually if our prepayment option mirrors the conservation success seen with a 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 pre-pay customers were able to save 12 percent on electric costs annually for the average household.

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.

Sticker shock is also preventable.

In fact, prepay 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 -- and pay as many times as 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.

To learn more, go to www.mlgw.com/smartgrid.