September 12, 2012

Prepaid Metering – A Recipe for Successful

Implementation

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Polling Question

Do You Like Ice Cream?

Deb RoepkeManager, Alliances & Development

Prepaid Metering – A Recipe for Successful

Implementation

Debra Roepke

Alliance and Development ManagerCooperative Research Network, NRECA

Agenda

� An overview of the recently released CRN Pre-paid Metering Analytical Report

� How pre-pay metering works

� The basic pros and cons of pre-pay metering

� How to implement pre-pay metering from a technology standpoint

� Why there is a sufficient business justification for implementing pre-pay metering

How many of your co-ops currently have a pre payment program?

�Yes�No

Polling Question

Mark Day

Vice PresidentUISOL, AN ALSTOM COMPANY

CRN Pre-paid Metering Analytical Report

� What is Prepayment?

� Technology Overview

� Program Policies

� Program Marketing

� Business Case

� Energy Efficiency

� Utility Questions

� Vendor Questions

� Utility Surveys

� Program Structure

� Prepay Vendors

� New Considerations

What is Prepayment?

�An advanced payment methodology

�Highly desirable for fixed/low income/other members

�A way to leverage your AMI investment

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Service Benefits

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US Prepayment System Evolution1G

WiredIntelligence in DisplayElectromechanical meters

2G 3G

“Wireless”Intelligence in MeterSolid State MeterLCD Display

AMI BasedIntegrated DisconnectMultiple Information OptionsGreater operational flexibility

Prepayment Today

Prepayment Engine Functionality

Basic Features

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Balance:$12.45

Average Usage:$2.37

Used Yesterday:$2.76

Used This Month:$67.93

Used Last Month$139.93

Prepayment Accounting� System takes periodic

consumption readings from meters

� Calculates monetary value of usage

� Subtract value from balance for new balance

� Overhead charges are pro-rated on a daily or hourly basis

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Balance:$12.45

Balance:$12.37

Balance:$11.89

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Debt Reduction�A Percentage of Each Purchase is

Applied to Bad Debt�Percentage Can be Set on a Per

Customer BasisAmount Tendered: $10.00

Percentage to Debt: 30%Payment to Debt: $ 3.00Amount toward Balance: $ 7.00

AMI Prepayment Advantages�Utilities have visibility of account status�Signup is expedited�Utilities can more easily intervene

– Moratoriums can be invoked

– Overrides

– Less stress on vending infrastructure

– No special field equipment

– Less truck rolls

� In Home Displays?

Vending

�An important component of the Prepayment solution

�Must support needs of members– 24x7

�Many prepayment solutions provide vending capabilities– Web/IVR based

– Prepaid credit cards

Prepayment Marketing

�NOT a passive marketing program�Mailers have limited effectiveness�Educate front line CSR’s�Use as alternative to:

– High Deposits

– Disconnects

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Chose it 83%

SystemAlreadyPresent

11%

Selectedfor you

6%

Brunswick EMC Survey Results

Prepayment Deployment Choices

Customer Satisfaction*Utility Type Rating (%)

Energy Utilities 74.7

Cooperatives 82

Touchstone Energy Cooperatives 83

*From the American Customer Satisfaction Index (ACSI) for 2011

• Can a utility put a dent in that last 15% to 20% without prepayment?

• Virtually every Prepayment satisfaction survey shows 85% or better satisfaction or better

Prepayment Business Case

Prepayment and Energy Efficiency

How has Prepayment affected your energy usage?

Prepayment Savings

Amount of monthly savings on Prepayment?

Monthly Energy Savings*

*Data courtesy of Pee Dee Electric Cooperative

Ten Utility Questions1. What are your business objectives?2. How well will my existing systems support prepayment?3. Are there any external regulatory or advocacy obligations

or obstacles?4. How do my business processes need to change or what

new ones do I need to define to support prepayment?5. What are my current obligations/restrictions for

disconnect?6. What is my expected customer penetration for

Prepayment?7. How will the program be positioned and structured?8. Who will manage the program?9. What is the overall impact of implementing prepayment?10.What is my overall long term vision for prepayment?

Ten Metering Questions1. What utilities are currently using your system for Prepayment?2. Are there any specific options that the meter must include for it to be used for

Prepayment versus a standard meter? Likewise are there any additional software modules in the AMI head end that are necessary to support Prepayment?

3. How frequently can the metering system provide meter data for balance calculations for 15% of the meter population?

4. Can your system support an in home display for the purposes of providng account information? If yes, how frequently can the metering system support the transmission of balance information to these displays for 15% of the meter population?

5. What is the typical latency from the time a disconnect or reconnect command is issued until the operation is completed? Are all commands guaranteed to be executed in proper sequence?

6. Can the reconnect methodology support an “Arm for Reconnect” process?7. Can the metering system support any type of load limiting or periodic load interruption

functionality in lieu of a full disconnect during times when disconnects are not allowed?

8. Does your metering system provide any specific functionality to support Prepayment? If so, what prepayment engines support its use?

9. With what head end prepayment application has the metering vendor integrated? Is there a preferred vendor or partnership?

10. What support, if any, does the metering company provide for the setup and implementation of a Prepayment program?

Ten Software Questions1. What utilities are currently using your system for Prepayment?2. How frequently can the software system provide balance calculations for

15% of the meter population?3. What are the customer notification options supported by the prepayment

software?4. What is the level of integration supported with the main utility CIS?5. What types of rates and account adders can the system support?6. How accurately can the prepayment software calculate the customer

charges?7. What are the vending methods supported by the system? Do these

methods require any specific arrangements with third party vendors?8. Can the software support “arm for reconnect” and or load limiting

functionality?9. With what metering system has the software vendor integrated? Is there

a preferred vendor or partnership?10. What is the overall cost of the prepayment software solution and how is it

structured? One time license? Per meter? Per transaction?

Utility Surveys

Example question from a series submitted to 8 utilities with active programs.

Prepayment Program Structure

Prepayment Should Not:

�Limit participation of members in other plans or programs

�Explicitly target any demographic�Be a stealth program

Reasons for Change

Prepayment Engine Vendors

• European vendor TailorMade• CIS Vendor support includes Daffron, NISC, and

SEDC

Emerging Technology Issues

• Several prepayment engines are built around legacy billing engines• Still have billing cycle limitations under the hood• Don’t support mid-cycle billing parameter changes• Apply base charges unilaterally• Some billing inequities are being exposed

New RateUsage Customer Balance

No Longer If, But When and How

• Major Programs• SRP

• Brunswick EMC

• OEC

• Texas

• New Programs• Georgia Power

• Progress Energy

• JEA

• APS

Thank You

Mark DayUtility Integration Solutions, Inc.

mday@uisol.com704-430-7697

Question: Where can I get more information?

Response : Go to www.cooperative.com for more details.

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