London, U.K. --- (METERING.COM) --- June 28, 2007

Most customers with prepayment meters in the U.K. are satisfied with the technology, primarily because of the degree of control over energy expenditure that they facilitate.

This was one of the findings in a new consultation commissioned by the energy regulator Ofgem, to understand customers’ views on the advantages and disadvantages of prepayment meters (PPMs) and to seek their opinion on potential improvements and on energy efficiency and possible ways of promoting it.

Most of the customers acquired a PPM (or switched away from one) when moving home, and most are confident with, and feel well informed about PPMs and have found ways to organise their lives around them. However most still forget to top up or run out of energy on occasion. A few said it would be useful to get a more prominent warning of this, but overall it is seen as an integral part of having a PPM, perhaps part of the trade-off with receiving no bills.

Some are mystified at how quickly their credit runs out – evidence that, although superficially confident in their use, there is much customers do not understand about PPMs and their own patterns of energy use. It is possible some of this is a result of recent steep price rises disrupting their “feel” for how much they are using. However, there is little awareness of relative unit rates for PPMs and the sums that are meaningful to them are the amounts by which they top up each time.

The key advantages of PPMs are a perceived ability to control one’s finances and allow budgeting and give customers responsibility for their own energy management. It is a convenient payment method, though really only for organised people whose lifestyle is compatible with the needs of a PPM for regular top-ups. For others, despite the inconvenience of occasionally running out, the security a PPM offers from the risk of a large energy bill outweighs most disadvantages.

On the other hand, the disadvantages of PPMs are led by the anxiety of running out of electricity or gas, especially if the customer has small children. Other, lesser, problems include top up points (proximity, opening hours, whether they sell both gas and electricity top-ups), faulty meters or cards/keys, lost cards/keys, inconvenient meter locations, higher costs than other methods and lack of good information on what is using the energy in their home.

Improvements to PPMs suggested by the participants fall mainly into two types: those to do with payment options and those to do with information provision. The former includes more flexibility in repaying emergency credits, a savings scheme to build up credit for the winter, phone/internet top-up in emergencies and weekly direct debits (if  switching away from PPM). Information provision includes providing information on historical usage (perhaps in graphical form), real time displays, information from consumer organizations to help them deal with doorstep selling and more convenient meter locations.

Overall, there is little agreement that customers should have to pay for innovations. They think there is insufficient recognition that PPMs give companies revenue in advance and so save them money. On the other hand, a few ex-users concede that maintaining choice of payment methods, including cash, costs the suppliers money and that PPM users could be expected to make some small contribution to this, assuming it is hidden in slightly higher unit rates.

When it comes to energy efficiency most have basic awareness of climate change issues, but there is a feeling that it is really up to business and government to tackle the problem, rather than ordinary people. Cost saving is the key motivation for most to save energy, but there is poor knowledge of what they use or how much they could save, and while there is some interest in receiving more information on usage and in real time energy use displays, many cannot be bothered and feel there is little scope for saving as most significant uses of electricity are not elastic, e.g. for washing and cooking.