Benefits of Utilizing an Benefits of Utilizing an Advance Pay ProgramAdvance Pay Program

‘Not just a new way of billing, but a new way of living’

Horry Electric Cooperative, Inc. primarily serves on the western side of the Intracoastal Waterway. Neighboring

utilities

Members 53,520

Meters 67, 993

Distribution line 4,950 miles

Substations 24

Overhead distribution 1,740.25

Underground distribution 3,215.68

Residential 86.4%

System Details

SERVICE AREA MAPSERVICE AREA MAP

Horry Electric Cooperative, Inc. primarily serves on the western side of the Intracoastal Waterway. Neighboring utilities include Santee Cooper, Progress Energy and Brunswick Electric Membership Corporation.

Horry Electric has franchise agreements with the City of Loris, the City of Myrtle Beach, the City of North Myrtle Beach and the Town of Aynor.

Overview

Instead of paying for electricity after it is already Instead of paying for electricity after it is already used, an Advance Pay account is set up so the used, an Advance Pay account is set up so the member pays in advance of using electricity.member pays in advance of using electricity.

As electricity is used daily, their credit balance is As electricity is used daily, their credit balance is reduced until either the balance is exhausted or reduced until either the balance is exhausted or

additional payments are added to their balance. If a additional payments are added to their balance. If a credit balance is exhausted, service is disconnected credit balance is exhausted, service is disconnected

until a credit balance is restoreduntil a credit balance is restored.

Benefits to ParticipantsBenefits to Participants

– Smaller paymentsSmaller payments– Customize a payment scheduleCustomize a payment schedule– Make payments at their convenienceMake payments at their convenience– Consumer awareness promotes conservation Consumer awareness promotes conservation – No bills or late feesNo bills or late fees– No disconnect or reconnect feesNo disconnect or reconnect fees– Avoid paying high depositsAvoid paying high deposits– Maintain service with existing debtMaintain service with existing debt

Account Information & PaymentsAccount Information & Payments

There are many convenient options for members to There are many convenient options for members to review their Advance Pay account information and review their Advance Pay account information and make payments. make payments. •MyEnergyMyEnergy Online Online member portalmember portal•Automated phone systemAutomated phone system•Preset alerts via phone, text, emailPreset alerts via phone, text, email•www.horryelectric.comwww.horryelectric.com•Horry Electric OfficesHorry Electric Offices•Multiple bank locationsMultiple bank locations

Target Audience

• Primary market – new members with credit flagged for high deposits

• Secondary market – members in delinquent status with deposit that will cover overdue balance

• Other opportunities– Rental properties– All single-phase residential members

Current Stats• Active accounts: 4,697Active accounts: 4,697• Accounts with Debt Recovery: 53Accounts with Debt Recovery: 53• Average Debt Recovery Balance: $250Average Debt Recovery Balance: $250• Average payment on prepay $47.30 from 1/20-2/18Average payment on prepay $47.30 from 1/20-2/18• Average prepay account balance for same dates -$27.00Average prepay account balance for same dates -$27.00• Total number of payments for same dates 22,629Total number of payments for same dates 22,629• Average payment to debt management for same dates $16.25Average payment to debt management for same dates $16.25HEC has collected $24,646.84 in debt management since 10/2013 HEC has collected $24,646.84 in debt management since 10/2013

Total Debt Reduction$165,687.75

MEMBER SUCCESSBACKGROUND OF MEMBER XBACKGROUND OF MEMBER X•Accrued debt of $1,700 on standard account. Accrued debt of $1,700 on standard account. •Unemployed and on disabilityUnemployed and on disability•Service was subject to disconnect and Co-op Service was subject to disconnect and Co-op was looking at writing off $1,700 bad debtwas looking at writing off $1,700 bad debt•Member called political officials, who begged Member called political officials, who begged us to reconnect knowing the debt could not be us to reconnect knowing the debt could not be paidpaid

MEMBER SUCCESSMEMBER X GOES ON ADVANCE PAY MEMBER X GOES ON ADVANCE PAY

MARCH 3, 2011MARCH 3, 2011•Debt rolled into the debt recovery systemDebt rolled into the debt recovery system•30% of each payment went toward debt30% of each payment went toward debt•Debt paid in full by December 22, 2011Debt paid in full by December 22, 2011•Member moved on January 18, 2012 only Member moved on January 18, 2012 only owing $100.36owing $100.36

MEMBER SUCCESS SUMMARY• Original debt: $1,700.00Original debt: $1,700.00• Final debt: $100.36Final debt: $100.36• Total debt savings of $1,599.64Total debt savings of $1,599.64• Member was able to maintain serviceMember was able to maintain service

Safety &Revenue SecurityUtilization of remote disconnect/reconnect Utilization of remote disconnect/reconnect switches.switches.

– Reduces exposure of line workers to the hazards of Reduces exposure of line workers to the hazards of disconnection.disconnection.

– Reduce cost of truck time for disconnection and Reduce cost of truck time for disconnection and reconnection.reconnection.

– Allows for after hours reconnections without the hazards Allows for after hours reconnections without the hazards of night time work.of night time work.

– Allows for remote monitoring of switch status. Allows for remote monitoring of switch status. Essentially this equipment can be the utility’s eyes in the Essentially this equipment can be the utility’s eyes in the field.field.

– Fast 24/7 reconnects Fast 24/7 reconnects

YEAR PERCENTAGE REDUCTION

2010 10%

2011 57%

2012 45%

2013 15%

Theft ReductionIn 2009, we had 102 cases of members In 2009, we had 102 cases of members

reconnecting themselves after being disconnected reconnecting themselves after being disconnected for non-payment. for non-payment.

AFTER IMPLEMENTATION OF THE PROGRAMAFTER IMPLEMENTATION OF THE PROGRAM

83% REDUCTION IN THEFT83% REDUCTION IN THEFT

In 2010, we had 14,213 cutoffs sent in the fieldIn 2010, we had 14,213 cutoffs sent in the field

AFTER IMPLEMENTATION OF THE PROGRAMAFTER IMPLEMENTATION OF THE PROGRAM

28.5% Reduction 28.5% Reduction

Reduction in Field Collections

Negatives• It’s not for everyone • Reduces field interaction with members• Explanations about how it works is

sometimes difficult for members to understand

• Interface between CIS and AMI systems can be difficult

• Selling/convincing the employees of your organization that it’s a good program

MarketingMarketing• Started SlowStarted Slow

– Pilot program June 2010-September 2010Pilot program June 2010-September 2010– Went live October 2010Went live October 2010– Hit primary market first, then moved to other Hit primary market first, then moved to other

opportunitiesopportunities– We now have 4700 Advance Pay accountsWe now have 4700 Advance Pay accounts

• MethodologyMethodology– South Carolina LivingSouth Carolina Living– Member Service RepresentativesMember Service Representatives– Brochures/SignageBrochures/Signage– Horryelectric.comHorryelectric.com– Social MediaSocial Media

Program GrowthYEAR (AS OF DECEMBER 31) NUMBER OF ACCOUNTS

2010 398

2011 2659

2012 3983

2013 4635

2/18/14 4697

Discussion/Questions

Jodi BrazielHorry Electric Cooperative, Inc.843-369-6270jodi.braziel@horryelectric.com