Utility to test pre-paid electric plan

Kevin Rademacher

Tuesday, June 22, 2004 | 10:50 a.m.

The pay-as-you-go trend is catching on for many businesses.

From pre-paid cellular phone plans and cash cards to funeral services and Internet access, consumers have shown an appetite for taking additional financial control. Now Nevada Power Co. of Las Vegas wants to see whether that appetite extends to electric usage.

The company has asked the state Public Utilities Commission to approve a trial program for pre-paid power. The plans would involve the installation of 100 pre-paid 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.

An alarm will sound in the home when the balance gets low and PUC filings indicate that a 24-hour grace period would be provided before service is discontinued. A Nevada Power spokeswoman also said that there would be no additional charge to restore service once the smart card is recharged.

The meter also will deduct, on a weekly basis, non-usage fees such as basic customer charges.

If the PUC approves the plan -- a July 13 hearing has been scheduled -- 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 customers. The commission -- and the company -- would have to decide whether the program would be extended to more customers at the end of the trial period.

A key component in the pre-paid power concept is the promotion of conservation. Marin said the company's research indicated that in other areas where the program is used, residential customers involved cut their power usage by about 10 percent.

"It helps the customers to tie actual energy use to what is going on inside the home," Marin said. "You can see the kilowatt hours deduct more quickly when you begin to turn on appliances."

During the trial consumers will be able to charge their pre-paid power cards at the company's Sahara Avenue offices as well as the North Las Vegas payment center, Marin said. If the program every goes system-wide, she said the company would need to make charging stations available at more locations, such as convenience or grocery stores.

The new meters and display box, during the trial, will be paid for by the utility. Customers, however, will be required to pay $20 at the time of application for the program. That will cover an initial kilowatt hour credit programmed into the meter. The customer will also pay a $50 deposit for the equipment.

Marin indicated that the company already has a number of customers that make more frequent monthly payments to avoid a single large bill. In filings with the PUC, Nevada Power also indicated that the program could cut down on past-due bills and bad-debt expenses.

Nevada Consumer Advocate Tim Hay, however, indicated that the costs for installing new meters could quickly chew up the financial benefit related to the conservation of power the program could generate. He did add that the company would benefit from reduced uncollectible consumer charges, but still indicated that he would likely object to the program in regulatory filings.