Prepaid power consumers using Salt River Project’s M-Power service reduce power consumption about 12 percent

This is an interesting idea. The 12% reduction seems questionable to me if its based on comparing the program customers with others customers. Those who select to be in the program seem likely to be interested in reduced bills more than average, or they are poorer and consume less to begin with.

I think the change in consumption (weather adjusted) for those customers from before and after joining the program would be more informative.

Knowledge Problem

via Prepaid power consumers using Salt River Project’s M-Power service reduce power consumption about 12 percent.

The most detailed study of a prepaid power program in the United States is EPRI’s “Paying Upfront: A Review of Salt River Project’s M-Power Prepaid Program.” The report provides a good overview and assessment of the program. See the abstract, copied below, for more of a description of the content.

One issue of interest with prepaid is whether it promotes energy conservation. The Salt River Project has studied this question a few times and, with varying methods, has found that M-Power customers tend to consume about 12 percent less power than customers on traditional post-paid power accounts.


A few weeks ago I met a program manager responsible for a prepaid service for one of the Texas competitive retailers. He spoke of how a prepaid contract changes the relationship between customer and retailer to one that is more “conversational.” Every day the retailer emails or texts the consumer with account status information. Additional, more detailed information may be available online. The relationship becomes more interactive. Perhaps there is something about the changing financial terms that changes the way prepaid retail consumers think about buying electric power. Or maybe this same change is available to any consumer with instant feedback from a smart meter.

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