A Primer on Prepaid Retail Electricity Service (PRES)

Prepaid electric service is now available. The Energy Regulatory Commission (ERC) issued a primer on prepaid electricity, but it appears to have been issued before the amendment of the Rules for Prepaid Retail Electric Service Using a Prepaid Metering Service. Let’s revise and expand the Q&A.

What is Prepaid Retail Electric Service (PRES)?

The PRES is an electric service using a prepaid metering system designed to allow a customer to purchase credit and then use electricity until such time as the credit is exhausted. Under the old rules, only residential customers are allowed to avail of the the prepaid service. Prepaid electricity service is now available to all customers — residential users, industrial and commercial establishments

Not all Distribution Utilities (DUs) can offer postpaid service, which means that only consumers within the area of approved DUs have access to prepaid service. DUs must apply with the ERC to offer PRES as an alternative electric service to the traditional post-paid electric service.

[See also Prepaid Electricity in the Philippines: Pros and Cons; Rules for Prepaid Retail Electric Service Using a Prepaid Metering Service, as Amended; Resolution 17, series of 2012: A Resolution Adopting the Amendments to the Rules for Prepaid Retail Electric Service Using a Prepaid Metering Service.]

How can a consumer avail of prepaid service?

Customers have the option to apply for a PRES on a voluntary basis. Customers are allowed a trial basis for 6 months to give them the opportunity to assess the impact of using the prepaid service.

After the 6-month trial period, the customer may: (a) continue with the prepaid service, but there is a 2-year retention period; (b) revert to postpaid service, although they could later avail of prepaid service, also subject to the 2-year lock-in period.

Certain customers may be required to use prepaid service: (a) those who have expressed their inability to pay existing bills under a postpaid service; and (b) those who have been found guilty of illegal use of electricity by final judgment by regular courts or administrative agencies. These customers may revert to postpaid but subject to approval by the distribution utility.

Benefits to Distribution Utilities?

* Reduction of system losses/pilferage
* Savings on service disconnection and reconnection fees
* Elimination of meter readers
* Improved collection efficiency
* Better cash flow

Benefits to Consumers?

* Favorable to those consumers who frequently travel and leave their residences and offices for a time

* Budget-conscious residential consumers can now control their electricity consumption better.

* Consumers may opt to buy electric energy credit in reasonably small increments

Other Benefits

* Elimination of unpaid electricity bills left by errant tenants
* Lessees need not apply for electricity connection
* Promote demand side management

Who will pay for the meters?

Customers shall not be made to advance the cost of or to purchase the meter. Meter deposits shall not be collected by the DUs from their customers.

How will customers know usage?

Customers should be provided with a mechanism or device to be used in monitoring and managing the rate at which energy is being consumed and in receiving warning when credit drops to the required threshold.

As required by the Rules, the prepaid electricity meter system must have the capabilities to: (a) load the purchased energy, (b) display real time information on how the load is being consumed and (c) give warning that the load is close to zero thereby providing a sufficient buffer before electricity is completely disconnected. The system must warn the customer 3 days before his/her remaining credit is exhausted, which is based on the customer’s average monthly consumption, with a threshold of ten (10) kWh for every one hundred (100) kWh.

What is a Prepaid Metering System (PMS)?

It is a system with capability to implement PRES, using prepaid meters that interoperate with a vending system which are compliant with Standard Transfer Specification (STS), or an architecture that creates a network between Advance Meters and DU’s meter management and billing systems.

Two concepts are identified in this definition — prepaid meter and STS. A prepaid meter is an electric meter that has the capability to load the purchased energy, to display real time information on how the load is being consumed, and to give a warning that the load is close to zero providing positive buffer before electricity is automatically disconnected. On the other hand, Standard Transfer Specification or STS is a secure message protocol that allows information to be carried between vending system and Prepaid Meters.

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