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Utilities beware: Prepaid Energy is not just for emerging markets anymore

December 5, 2016 7:00 AM

Category: Happier Subscribers Pricing Innovation | by Stefan Henss

Gone are the days where established energy utilities can bound their concerns to aging infrastructure and getting more power out of the grid. Today, energy providers need to balance consumer demand with the level of output across the system, but this can often be hard to manage especially if demand and consumption patterns continuously change or peak unpredictably.

This September, energy demand in the United States rose 103 percent above average, driven in large part to higher than average warm temperatures.  As standards of living improve in many countries, demand on electricity will rise placing pressure the energy infrastructure.

Prepaid Energy programs have the potential to be disruptive even in established postpaid markets. As more energy grids undergo modernization, the metering technology to introduce prepaid energy billing is becoming commonplace. Attitudes are also changing to accept prepaid energy, once an unthinkable concept is now seen to be no different than having a prepaid telephone – a commonplace service available in many markets. Energy resellers and enterprising marketers are now stepping into the market gap and introducing prepaid energy programs – with aim to steal away your postpaid customers.

Meralco is a leader in the prepaid energy market, having implemented its first prepaid energy program more than 2 years ago. According to Mr. Tony Valdez, Meralco’s Vice President and Head of Marketing, Customer Solutions & Product Development, there are two utility market segments that find prepaid energy billing extremely attractive:  utilities for rental dwellings, and new high-rise building development.

In metropolitan cities, a large portion of the population rent their living spaces. Rental spaces outfitted with a smart meter and connected to a prepaid billing program are truly attractive for both the tenant (as they use every cent they pay for) and the landlord (who are never left with unpaid bills at the end of the lease). That power connections can be remotely turned on or disconnected present new control opportunities – such as adding accurate fees for electricity use on short term accommodation rentals, or preventing unauthorized electricity usage while the residence is temporarily vacant – the consumer only pays for the energy they use.

For Meralco, prepaid energy is not only about the potential uses but also the customer experience. Prepaid energy gives customers greater control over the their consumption with notifications providing warnings of low balances, allowing customers to better budget their energy needs, and online portals offering information about energy consumption, remaining balances and rates.

New construction developments are increasingly aware of the benefits of installing modern smart meters with many builders using them to differentiate their residential condominiums and market them as energy efficient, modern, and eco-friendly.  The question is now if we will see energy providers follow Meralco’s lead and enter the prepaid energy market to improve the customer satisfaction and the overall experience with the energy provider.

To learn more about Redknee’s Smart Prepay Energy Solution, visit our website or contact us at