Salt River Project (SRP), Phoenix, Arizona, U.S, offers the SRP M-Power program, which provides prepay electric utility service to residential customers. The concept of prepayment was initiated at SRP in 1993 in the form of a pay-as-you-go pilot program, PAYGo, which was offered to customers with marginal credit status.
Surveys of the customers in the program revealed that about 92 percent were satisfied with it and many were very satisfied, giving PAYGo the highest level of satisfaction of any program so far offered by the utility. About 75 percent of these customers indicated they had a higher opinion of SRP after participating in the program. This result was especially notable, since many of the participants entered the program with a negative view of the utility, after having experienced late-payment fees, disconnections and increased deposits. Despite the popularity of PAYGo, its technology made it economically impossible for SRP to offer the program to all residential customers. To overcome this deficiency, SRP and Motorola Inc. of Scottsdale, Arizona, worked together to develop the new Motorola PowerCom system. Now being used in the SRP M-Power program, this system uses a "smart card," which transfers the dollar amount prepaid by the customer into the house meter.
A unique feature of the smart card technology is the two-way communication that is established between customers and the utility. Credit for energy usage is purchased at automated payment terminals or at the SRP business office and is recorded on the card, which can store up to 128K of information. The smart card is the size of a conventional credit card and communicates with the meter through power line carrier (PLC) technology after being inserted into the customer's display unit (DU) in the home. Upon insertion, prepaid energy credits are loaded onto the meter while the meter writes energy usage and meter health information onto the smart card.
How it Works Inside the customer's home, a PowerCom DU with liquid crystal display is plugged into any regular wall outlet and displays information from the meter through the PLC system. The DU has two lines of up to 16 alphanumeric characters that are programmed to display in English or Spanish, although other languages may be programmed as well.
The information loaded onto the smart card by the meter includes the date and time the card was accepted by the meter, the kilowatt-hour reading on the meter at the time of the transaction and the credit remaining on the meter immediately after the transaction. In addition, the meter transfers meter health information, data related to the last 10 transactions, and the date and time of the last 10 power events involving loss or restoration of power. At the next purchase of energy credits, the information from the meter is transferred from the smart card to the utility's back office software.
The information DU provides to the customer includes: * Credit remaining on the meter * Estimated number of days left before the credits expire * Amount of energy currently being used per hour * Amount of energy used in the current month, yesterday and last month displayed in dollars and kilowatt-hours. * Price paid per kilowatt-hour.
The system calculates average daily use and issues an audible warning, a red alert light and a text message when four days of energy are left on the meter. If energy credits are not loaded onto the meter, the audible warning, alert light and text message are repeated each day for the remaining time. When energy credits are depleted to the equivalent of about 60 min to 90 min, the DU emits a constant audible signal, red alert light and text message instructing the customer to insert a smart card to load energy credit onto the meter. If additional energy is not purchased and loaded, power will be shut off to the residence by tripping a 200-A switch in the meter that is activated when energy credit reaches zero. The PowerCom system is designed to override the disconnect switch to comply with legislation in states prohibiting disconnection when temperatures are above or below specified levels. The utility has the ability to provide an override command onto the smart card when the customer purchases power and to later deactivate the override.
The Power Management System Motorola's PowerCom power revenue system consists of several parts. The back office software provides the account management for all prepay customers and interfaces with the utility's customer information system. The field service unit allows information to be transferred between the back office software and PowerCom meters using laptop computers that serve as remote field service units (RFSU). Service call requests are downloaded to the RFSU to give field personnel instructions regarding meter installation and maintenance assignments. The RFSU also is used to collect meter information and upload it to the management system, communicating directly with the PowerCom smart meter through a standard infrared optical port. The smart meter is fully electronic with a real-time clock and backup battery. Through the meter/RFSU connection, field personnel can read and download meter information, initialize a meter for a new customer, load energy credit onto the meter and turn power on or off.
SRP anticipates that M-Power customers will purchase their power almost exclusively from SRP PayCenters, where the utility has installed automatic pay terminals developed in conjunction with Diebold, Canton, Ohio, U.S. The PayCenters were originally used to provide a more convenient payment option to traditional credit cycle customers. However, in the PAYGo surveys, customers indicated they would like to be able to buy power from ATMs instead of having to go to an office during business hours. SRP responded by working with Diebold to upgrade the SRP PayCenters to handle power-purchase transactions for PAYGo customers. A subsequent upgrade involved installing hardware to allow energy credits to be loaded onto the smart cards used in the SRP M-Power program. Most PayCenters provide 24-hour access and are located in grocery stores, convenience stores and business offices. As the program grows, SRP plans to increase the number of PayCenters.
One advantage of PowerCom technology over SRP's other prepay system is that installing the hardware is easier. Once the meter is installed, the PLC technology simply requires a customer to plug the DU into an outlet, enabling it to act as a conduit between the smart card and meter by transferring information through the house wiring. The PAYGo program used hard wire technology, which required a journeyman to drill holes in the house and install a conductor from the meter through the meter panel into the customer's home to connect to the DU. Therefore, the PAYGo customer had to be at home to let the journeyman in. In contrast, SRP M-Power customers only need to provide access to the meter being changed out. Access to the home is not required, allowing meter installations to be completed in a logical, geographic order rather than on an appointment basis.
Other Benefits Other cost savings realized through the SRP M-Power program apply to traditional costs of doing business. Routine meter reads are reduced to about once a year because the technology communicates information to the utility through the smart cards. The cost of preparing and sending a bill is eliminated along with the need to send disconnect notices. Fewer credit-related calls are received in the customer service call center, and the number of payments made at the business office are significantly reduced. The labor costs involved in field collections, disconnection and reconnection, as well as the write-off associated with these accounts, are eliminated for customers on the program.
Customers see benefits as well, because deposits are no longer required. In addition, the DU in the home provides information about power usage, giving the customer the ability to manage consumption. A major benefit is that customers can purchase energy at any time and in any amount they can afford, avoiding a large bill each month. Many customers say they prefer the self-disconnect feature because they do not have to pay late fees, past due amounts, disconnect and reconnect charges and increased deposits to get the electricity turned back on. They also appreciate avoiding the discomfort associated with an SRP truck driving through their neighborhood to disconnect power.
The Future Although prepay electric service has been used in many countries worldwide, the practice has not been widespread in the United States. SRP and Motorola have collaborated to bring the service to this country. Over time, the two companies plan to improve the technology to provide more benefits to utilities and their customers.
Rachel Dibble is a planning analyst in Customer Accounts and Analysis at SRP. She received the BS degree in economics and business in 1991 and is pursuing the MBA degree at Arizona State University.