Prepaid electricity is here but will it benefit consumers?

By Virgil B. Lopez
Wednesday, October 19, 2011


AS THE Filipino love affair with prepaid mobile services continue to blossom, power distributors and electric cooperatives are racing against time to provide prepaid electricity to millions of households nationwide.


Current technologies now allow electricity consumers to "reload" their meters from any location through mobile text or SMS and keep track of their consumption.


However, rules about the Prepaid Retail Electric Service (Pres) still need to be refined and approved by the Energy Regulatory Commission (ERC).


But this has not discouraged a Shanghai-based company from taking the lead.


Julong Electric Power Co., together with software and other service providers, earlier forged a tie-up with Xen Energy Systems, Inc. (XESI) to develop a meter for prepaid electricity suitable to the Philippine market.


The joint effort produced a local version of the PLC-AMR or Power Line Carrier Automatic Meter Reading system, which allows consumers to manage their electricity supplies through text messaging.


Besides allowing for easy reloading of electric meters through text, XESI president Ariel Dela Cruz said the “Prepaid Kuryentext” offers security due to adequate safeguards in user IDs and passwords and has reliable mechanisms in times or disaster or emergencies.


The tracking of consumption in 30-minute intervals also allows the consumer to make “demand side management” decisions, he said.


For instance, the customer can start switching off unnecessary devices since his credit is diminished, leading to more prudent electricity use.


Moreover, the real time tracking of transactions leaves an audit trail that will be helpful in case of consumer complaints or conflicts with utilities.


The meter can be turned on or off from anywhere via mobile text, with a valid username and password, Dela Cruz said.


Mobile telephone subscribers in the Philippines reached almost 90 million in 2010, according to industry estimates.


At least nine local electric cooperatives including the Batangas 1 Electric Cooperative, Zambales Electric Cooperative, and the Tarlac Electric Cooperative have already pilot-tested the prepaid retail electricity system, with Batelec 1 leading others in filing a service application with the Energy Regulatory Commission (ERC).


The Manila Electric Co. (Meralco), the nation’s largest power distribution firm, has also set its sights for an initial offering of prepaid electricity next year.


Sun.Star tried to reach Meralco external communications head Joe Zaldarriaga for further details but to no avail.


In a statement last month, Meralco senior vice president for corporate communications Alfredo Panlilio said the company continues to evaluate vendor proposals for implementing the service along with the guidelines issued by the ERC.


Once their meters are loaded, consumers will get a confirmation text and electricity is immediately provided.


When credits are running low, consumers will receive a warning text, approximately four days before electricity is cut off.


Countries that have embraced prepaid electricity include South Africa and Indonesia, and more recently, India, Australia, and New Zealand.


In South Africa and Indonesia, prepaid electricity is used by consumers using tokens and a meter with numbered keys where a code is punched in.


So far, ERC Executive Director Francis Juan said 10 prepaid meter manufacturers have submitted their application with the agency to sell the units. These manufacturers come from the United States, South Africa, and China.


“As for the prepaid meters, any such meter can be utilized for so long as the meter type has already been approved by ERC. The decision whether or not to offer prepaid electricity service is for the utility to make,” he told Sun.Star.


Customer satisfaction not guaranteed


Meanwhile, consumer group Freedom from Debt Coalition (FDC) said customers will still be at the losing end on the use of prepaid electricity.


“Prepaid electricity would mean further limiting access to power without necessarily improving the quality of service. [What are the ramification for] the rights of electric consumers as enshrined in the Magna Carta for residential customers?” FDC-Cebu secretary general Aaron Pedrosa told Sun.Star.


Pedrosa said prepaid power “precisely discriminates on the basis of who can afford it” while circumventing provisions on the disconnection of service.


Sonny Africa, research head of militant think tank Ibon Foundation, said everything is up in the air with regard to consumers getting cheaper rates and continuous service under a pre-paid set up.


“We have to see if the charges will be lower so anything from now will be speculative. Given the persistently low and erratic incomes of poor households though, there’s reason to expect that they will suffer power interruptions more under a pre-paid scheme,” he said in a text message.


In response, a joint technical committee between government and the industry may be constituted to thresh out possible wrinkles in the implementation of Prepaid Retail Electric Service authorized by the ERC in 2009.


ERC Commissioner Gloria Yap-Taruc, who is in charge of consumer concerns, cited the working committee as the ideal venue for balancing consumer and utility interests when the new retail and electricity supply systems are put in place.


The consumers have to be fully informed of how the prepaid system would work to their benefit without sacrificing the quality and reliability of the service provided by the utility, she said. (Sunnex)