Prepayment Meters: The Low-Income Perspective

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Prepayment MetersThe Low-Income Perspective

• Roger Colton
• Fisher, Sheehan Colton
• 34 Warwick Road
• Belmont, MA 02478
• May 2002

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Payment troubles and low-income status

• Census 32.4 of LI behind vs. 9.8 non-LI
• Similar state figures
• Illinois
• Iowa
• Maryland

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The narrowing of choices

• Lack of payment plan option
• Lack of short-term arrears option
• Iowa LIHEAP survey
• Medical care
• Food
• Home energy
• Consumer debt

4
Consider the working poor

• 76 percent of workers in the bottom quartile of
  family income lack regular sick leave.
• 58 percent of workers in bottom quartile do not
  have consistent vacation leave.
• 78 of workers beneath the median income level
  cannot choose or change their starting and
  quitting times, or take days off to care for
  their sick children.

5
The problem of hidden shutoffs

• Rather than having a disconnect for non-payment,
  the meter simply runs out of money.
• Great Britain Nearly 4 million customers use
  prepayment meters.
• One-third of gas customers self-disconnected.
• More than one-quarter of electric customers
  self-disconnected.
• Compare to 5 - 6 disconnect rate

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Why Salt River Project is not a good comparison

• 58 are homeowners
• Average family income 31,000
• Average family 4 persons
• Average customer gt 10 years

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Not good economic sense

• Cost of meters 7.50/mo x 12 mos 90/year
• Average savings 10 x 7,000 kWh x 0.10/kWh
  70
• SRP savings only arose from aggressive energy
  education program.

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The fallacy of consentin the face of
disconnection

• Consent is vitiated by duress
• One recognized cause of duress is economic
  coercion
• Economic coercion occurs when consumer believes
  no real choice.
• When duress is present, no consent can be found.

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If you have questions

• roger_at_fsconline.com