Prepayment popular amongst wealthy US consumers 13 JUNE 2016

Management consulting firm, Distributed Energy Financial Group (DEFG), has found that interest in energy prepayment is rising amongst wealthy US consumers.

This is evidenced by a survey recently conducted by the energy management consulting firm to measure the level of interest of affluent Americans in a prepayment service.

According to its findings, the firm found that interest in pre-paid energy has increased by 11% to 28% from last year’s level of 17%.

To gather the data, DEFG in partnership with the Prepay Energy Working Group surveyed 500 US consumers with a minimum annual income of US$50,000.

Amongst the surveyed consumers, 69% showed interest in using electricity prepayment to manage and reduce their energy usage and costs. Moreover, 79% were interested in learning more how the service positively impacts on environment – through reduced consumption and carbon through generation.

In a press statement, DEFG states that the study, Ecopinio 25 “Prepay for Everyone: Prepay Energy and Higher Income Americans, contradicts the fact that the offering is for low income customers.

Jamie Wimberly, the CEO of DEFG LLC, commented: “For higher income Americans, it is more about making it easier and more convenient to remotely manage assets, e.g., vacation homes or rental property, and people, e.g., a student away at university, than anything else. Plus, like with prepaid Starbuck cards, affluent consumers are quickly moving towards cashless transactions.”

60% of the affluent consumers indicated their interest in the offering as they are also seeking to move to paperless transactions.

“If the messaging and marketing are aligned specifically to the preferences and predilections of the higher income segment, I predict that you will have even greater enrollments by higher income customers than other customer classes,” added Wimberly.

“… prepayment in general is associated with high customer satisfaction for all segments because it is viewed as a more convenient way to pay bills and expenses, so it stands to reason that prepay energy would also be of interest to a broad range of Americans from all income levels.”

Electricity prepayment service planning

The survey follows DEFG’s release of a whitepaper, “The Cost and Benefits of Pre-Paid Energy Services”, to provide a framework and foundation for stakeholders considering the launch and regulatory approval of electricity prepayment. [DEFG issues paper on electricity prepayment]

The report analyses the costs of electricity prepayment including costs of launch and support of the program as well as the service’s impacts on both the consumer and the provider.

According to the whitepaper, the main challenge which utilities are facing in adopting electricity prepaid service lies within fitting the service into traditional regulatory models.

Adding to this, identifying the party responsible for the costs as this may complicate planning around costs allocations and benefits realised.

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