One of the readers tipped me off to something I had never heard of: Prepaid Electricity. Most of us sign up with a utility after they check our credit and deem us worthy, use electricity all month on credit, then get billed by the utility at the end of the month on the faith that we will pay them for the energized electrons they provided to our home. But some people aren't so lucky to have good jobs and/or good credit, and it makes it harder for them to get credit for electricity (we don't think of it that way, but we buy electricity on credit and most of America says, "Keep the tab open Electric Co.!"). While there are obvious benefits for utilities to employ prepaid electricity for non credit-worthy customers, there are also advantages to the customer too. UtiliFlex lists prepaid electricity benefits as:
- No Bill Due Date: Never receive an electric bill again. Prepaid customers pay as they go, with no surprises.
- Control Your Cost: Buy what you want, where you want, when you want. Make your power purchase go further.
- Save Money: Same rates, No fees.
- No Deposit: No need for hefty deposits. Apply existing deposits to your balance.
- Get Out of Debt: Pay past balances over time, while still receiving service.
- Conserve Energy: Studies show prepaid customers use 10-15% less power than post-paid customers.
From UtiliFlex's About Us section:
Prepayment is not limited to credit-challenged customers. When properly deployed and marketed, a broad cross-section of consumers finds prepayment an attractive alternative that puts them in control of their electricty consumption. Customers appreciate the ability to budget and control their electricity costs and the feedback inherent in the system.
Prepaid consumers pose no credit risk to their electrical service providers. Deposits are not required from prepaid consumers which eliminates the need to compute interest on deposits. There is never a past-due balance; invoicing and collection efforts are, therefore, eliminated.
While I don't see many customers choosing to prepay for their electricity (only because it decreases the convenience factor), it is an interesting concept and it will only increase in popularity as electricity costs rise and consumers look for ways to gain control of their consumption. I wonder if prepaid electricity rates would be higher than rates paid by normal customers? Does anyone have experience with prepaid electricity?