Official favors prepaid power test

Kevin Rademacher

Wednesday, Aug. 18, 2004 | 11:17 a.m.

A state utility regulator has indicated that he favors a plan by Nevada Power Co. of Las Vegas to institute an optional pay-as-you-go plan for electric service.

In a draft order unveiled this week, Public Utilities Commission Chairman Don Soderberg recommended approving the prepaid electric meter trial. The order must still be approved by the full commission. It is scheduled for a vote today.

Earlier this year, the company asked the PUC to approve the trial program, which involves the installation of 100 prepaid power meters that would allow consumers to charge "smart cards" with between $1 and $250. The card would then be inserted in an in-home box that tracks the amount of cash left on the card and estimated days left based on average kilowatt hour usage.

If the cash on the meter runs out, customers can receive an emergency 24-hour grace period before service is discontinued. There would be no additional charge to restore service once the smart card is recharged.

The draft order also called for allowing customers signing up for the voluntary program to be able to withdraw without incurring any penalties for returning to standard service. PUC staff members said such fees could be a deterrent to customers considering taking part in the program.

If the PUC approves the plan, it would be rolled out for an initial trial for 50 utility employees. That trial will allow the company to work out any kinks in the meters that must be installed as well as the in-home display unit, said Carol Marin, Nevada Power's vice president for customer service.

If successful, the trial would be extended to 50 additional customers. The commission -- and the company -- would have to decide whether the program is extended to more customers at the end of the trial period.

The state Bureau of Consumer Protection expressed concern that the plan could lead to a higher number of service terminations.

And John Howart, senior energy policy analyst for the National Consumer Law Center, said participation should be limited to customers with household incomes exceeding 150 percent of the federal poverty level. He did indicate that the plan should help Nevada Power reduce its late payment levels.

Howart also said that the company could eventually attempt to force low-income customers to use the prepaid meter and be forced to pay higher costs associated with the technology.

Nevada AARP officials also opposed the implementation of the plan on the same grounds.

Howart said that the use of the prepaid meters would allow the utility to circumvent existing regulations -- known as the Consumer Bill of Rights -- that spell out specific instances in which service can be terminated.

In response, Nevada Power said that it will be assessing the cost during the trial period and emphasized that, should the trial be successful, it would only be another alternative to standard service. The utility also indicated that it would pursue government subsidies for low-income customers who eventually want to participate.

In the draft order, Soderberg said that since the program is only being proposed as a voluntary trial, the BCP's concerns were premature. He also emphasized that participation in the program would be a customer choice.

"A customer volunteering to participate in this trial program has a responsibility to determine if the program is suited for them and to manage their actions within the program," Soderberg's draft order said.