The pros and cons of prepaying for electricity

PIAC recently responded to a discussion paper by the Energy and Water Ombudsman NSW (EWON) about electricity prepayment meters.

Anyone who spent time in a place like England in the 1980s will remember energy prepayment meters as clunky coin-operated devices that allowed people without much money to keep the heat on for short periods of time. Modern prepayment meters are much more like the prepayment systems that consumers are familiar with from their mobile phone or other such service provider.

Supporters of modern prepayment arrangements argue that they give people greater control over their electricity expenditure and prevent the accumulation of large debts. Opponents, including many consumer welfare organisations, argue that prepayment meters result in high levels of automatic disconnection, with harmful consequences for the customers involved.

PIAC’s submission highlights how prepayment can be a good option for some consumers but that such arrangements are, in effect, already offered by many retailers through bill smoothing and Centrepay arrangements. PIAC’s submission also emphasised that the broader roll out of prepayment arrangements must be accompanied by appropriate protections, including programs to allow customers who prepay to access energy rebates.


Pin It on Pinterest