PREPAYMENT METER SYSTEMS

Making

Energy

Affordable

Prepayment Meter Systems

Effective Budgeting

Prepayment meter systems can be a useful way for cus-

tomers to budget, especially ones on a low income. Cus-

tomers pay in small amounts as they go, rather than

receiving a large bill every 2 months.

Up to date consumption feedback

Customers received up to date feedback as to their ener-

gy use, and therefore try to adjust their usage according-

ly. Customers gain an understanding on the importance

of conserving power within a short time through using a

prepayment meter system.

Energy costs can be shared

Prepayment meter systems provide an opportunity for

the burden of energy costs to be shared by people living

in the house, rather than falling onto one person’s name.

Short term visitors, roommates or family members can all

pitch in by purchasing recharge cards and contribute to

power costs.

Preventing arrears, credit action and reconnec-

tion costs

Customers cannot build up high arrears, which are then

difficult to pay, and can result in debt collection action

and credit defaulting listing.

Customers avoid additional fees such as disconnection

and reconnection costs

ADVANTAGES

Prepayment Meter Systems

Introduction

Rising electricity prices have made customers increasingly aware of the importance of monitoring and

controlling their energy use.

In Coober Pedy, residential electricity bills are issued every 2 months after the consumption of elec-

tricity takes place. This means there is a significant delay for the customer receiving feedback as to

how much electricity they are using, and gives little opportunity for the customer to adjust their be-

haviour if their usage is higher than expected. A customer may have forgotten that their consumption

of electricity may have been higher due to an extended period of hot weather during the summer

months.

Many people are familiar with the concept of prepaid mobile phones. These mobile phone plans are

an effective way of safeguarding against unexpectedly high phone bills. A prepayment meter system

would work in a similar fashion as a prepaid mobile, and would be an effective way of controlling the

amount of energy consumption and debt that a customer incurs.

What is a prepayment meter system?

A prepayment energy meter is a type of domestic energy meter that requires the customer to pay for

energy before they use it, similar to a prepaid mobile. This is done via a smartcard, token or key that

can be ‘topped up’ at a local store or via a smartphone app.

How does a prepayment meter system work?

A prepayment meter is like a prepaid mobile phone, where as you have to pay for your electricity

upfront before you can use it. You would have to top-up with credit to continue to use your

electricity.

Generally electrical retailers offer a smartcard, token or a key that can be topped-up at a shop or ‘one

use only’ tokens can be bought that are used to enter credit onto the prepayment meter system.

Some retailers offer a phone app on online option that allows the customer easily make payments at

any time of the day.

What happens if I run out of credit? A prepayment meter system will self-disconnect (turn off electricity to the property) if it runs out of

credit. A prepayment meter system will only disconnect power between the hours of 10am – 3pm on a

week day, it will not self-disconnect on a weekend.

Once credit is entered into a prepayment meter system it will instantly re-connect supply to the prop-

erty.

Prepayment meter systems are required to have an ‘Emergency Credit’ feature. This feature stores a

small amount of credit away so that can it be used if electricity is required after the prepayment sys-

tem runs out of credit. If this feature is used the prepayment meter system will re-connect electricity

supply to the property until this all the emergency credit is used.

If a prepayment meter has self-disconnected because it has run out of credit & emergency credit,

when credit is next added to the prepayment meter system it will take the pre-determined amount of

emergency credit from the added credit amount and store this away for the next time the emergency

credit feature is required.

Prepayment Meter Systems

Prepayment meter systems in other States &

Territories

Tasmania

Prepayment meters have been used in Tasmania since 1997. Customers can purchase an amount of

credit between $5 - $200 by taking their smart card to any Recharge Agent – generally newsagents, ser-

vice stations or supermarkets.

A standard amount of emergency credit in Tasmania is $18 that customers can use if they run out of

credit.

Northern Territory

A report project undertaken by Bushlight in 2013 noted that there were over 8500 prepayment meter

systems in the Northern Territory. These systems are mostly used in Indigenous communities, town

camps and public housing.

Payment is made by a single use cardboard card with a magnetic strip purchased at a local store. Card

values varied between $5 and $50. The amount of emergency credit used in the NT is between $5 and

$10.

Causing disadvantage from self-disconnection

Customers that lose supply when they cannot afford to

buy credit may experience personal/household disad-

vantage (food spoilage, no heating/cooling, lighting, hot

water etc) until they are able to afford to purchase addi-

tion credit

Reducing disconnection visibility

Customers may have to keep checking the balance of

credit remaining on the meter, or risk the chance of self-

disconnection

Payment challenges

For some low income customers, there may be resistance

in paying in advance for electricity, seeing this as a bene-

fit to the DCCP rather than to themselves

Customers without internet access or a mobile phone

may only have limited options for purchasing credit

Where credit is purchased via tokens or ‘single use only’

cards, access to the recharge points may not be conven-

ient – they may not be open at all hours or the customer

may not have a vehicle to get to recharge points which

could be hazardous during the hot summer months

DISADVANTAGES

ENTERPRISE MANAGEMENT SERVICES

Prepayment meter systems in other countries

New Zealand

Prepayment meter systems have been used in New Zealand for a number of years. One popular retail-

er Glo-Bug offers a system with an In-Home Display (IHD) to assist with monitoring power consump-

tion. It does this by changing colour depending on the amount of credit remaining on the prepayment

meter system:

Green means there is more than $10 credit remaining

Orange means there is less than $10 credit remaining and the prepayment meter system will self-

disconnect at midday the following day if not topped up

Red is an urgent warning that means supply will be disconnected at midday that day. Once the

power is disconnected the system no longer displays a colour.

United Kingdom

It is estimated that there are 4 million people in the UK that use a prepayment meter system. Custom-

ers use a token, key or smart card to add credit which can be purchased or topped up at their local

store.

Prepayment meter systems are common in rental properties in the United Kingdom.

South Africa

By 2000, approximately 3.2 million prepayment meter systems were installed in South Africa. They are

used with a once only use token with a magnetic strip that is entered into the prepayment meter,

alike a bus ticket or they have a 16 or 20 digit code that has to be manually entered into the keypad on

the face of the meter.

Prepayment Meter Systems

Prepayment meter systems have proved to be successful for energy

customers all over the world. There is evidence to suggest that cus-

tomers who choose to use to a prepayment meter system over a tradi-

tional energy meter, will have greater control over their energy usage

and energy costs.

This lends itself to customers, especially those on low income, being

able to better manage their budgets and share their energy cost

throughout the household.

As the price of energy doesn’t look to be decreasing in the near dis-

tant future, prepayment meter systems may prove to be a great solu-

tion for both retailer and electricity customers in providing a sustain-

able and affordable source of electricity.

Conclusion

District Council of Coober Pedy Hutchison Street Coober Pedy, SA 5723

Ph: 0886 724 600 Fax: 0886 715 699 Email: dccp@cpcouncil.sa.gov.au

www.cooberpedy.sa.gov.au

Prepayment Meter Systems