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Prepay for Electricity?

APS pilot project begins next year

sewing, Arizona pre-paid electric meters

Janice Allen, of Mesa, says she’s benefited from the convenience of prepaying for her electricity. Arizona Public Service Co. will launch a two-year prepayment pilot project next year. — Photo by Andy Delisle/Wonderful Machine

En español | When Janice Allen, a 63-year-old receptionist at a Mesa charity, couldn't pay a $350 electric bill, her power company, Salt River Project (SRP), proposed that she avoid future spikes in her monthly bill by prepaying for her electricity.

She now pays from $20 to $60 every other week at an SRP kiosk at her grocery store.

See also: Affordable Utilities Now!

The program is similar to prepaid cellphone plans for customers with minimal credit ratings; it shifts the risk of nonpayment to the consumer. It's a way for consumers to be more aware of their electricity usage and for utilities to reach energy conservation goals, according to power companies.

Allen has an in-home monitor that shows the cost of the power and how much power remains before it will automatically cut off unless she makes another payment. Her grandchildren pay attention to the meter. "I don't have to tell them to turn off the lights," she said.

Consumer groups, including AARP Arizona, worry that as more prepaid meters are used, more people — especially older people — will lose their power, which can be dangerous to their health in the desert climate.

More than 122,000 of SRP's 950,000 households prepay for power — the most of any utility in the nation. The program began in 1993. SRP says it doesn't track how many prepay customers have been cut off.

APS to launch two-year pilot

Arizona Public Service Co. (APS), the state's other big utility, is starting a pilot prepayment program March 31.

APS, a public corporation, is regulated by the Arizona Corporation Commission. (SRP, a quasi-municipal corporation, is not.) The commission ordered APS to consider suggestions from consumer advocates, including AARP, before the program launches.

Steve Jennings, AARP Arizona associate director, said the prepay program makes it too easy for people to have their electricity turned off.

"Prepay is a potential danger in a climate like ours. We believe if someone is going to lose their power, that they should have a personal visit before power is turned off."

AARP Arizona has asked APS to track disconnections and examine the circumstances of why older people are cut off.

APS expects about 2,000 people to enroll in the two-year pilot program. Volunteers who want to try the prepay program are being recruited from its 1.1 million customers in 11 counties.

While a recent SRP study shows a 12 percent reduction in energy use by prepaid customers, Jennings questioned whether rationing comes at the expense of healthy temperatures. For example, during the summer when her bill is highest, Allen keeps the thermostat in her one-bedroom apartment at 85 when she's home, and 90 when she's away.

"It's comfortable for me," she said.

Next: Giving consumers more control. >>

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