[BETA] Fortnightly

More than just software, prepaid billing remakes the business.

It revamps operations and changes the customer relationship.

There are no technical impediments that stand in the way for prepayment meters in North America. Whatever roadblocks do exist lie more with the state legislatures and with the culture of gas utilities and consumers."

Those comments come from Janet Penz, product manager (diaphragm meters) for Schlumberger Industries, speaking from her new Canadian office in Mississaugua, Ontario.

That picture tends to mesh with answers we received from other vendors and manufacturers when we asked them to comment on prepayment billing. Overall, they emphasized several points:

• Restructuring. Pay-as-you-go metering can revamp the utility's entire billing process, reducing bad debts and saving collection costs;

• Consumer Awareness. Prepaid metering turns the utility/ customer relationship on its head, offering choice and control to consumers;

• Legal Roadblocks. Laws or regulations may block some prepaid metering strategies in certain states; and

• System Integration. The next step means integrating pay-as-you-go metering with other technology applications, such as customer information systems (mainframe or client-server) or automated meter reading (AMR) equipment.

Carl J. Powell, sales manager, Siemens Measurements Ltd., speaking from his office in Oldham in the United Kingdom, sees "very few technical problems" in setting up a smart card system. "The technology is proven," says Powell. "The only problems I could see would be ones of customization of the metering product and the linking of the vending system to the main frame billing system of the utility."

Jon Thomas echoes that view. As president of CIC Systems, Inc. (Nashville), which designs and supplies PowerStat,Ô a pay-as-you-go metering system, and which claims to be the only U.S. vendor of electric utility prepayment systems, Thomas sees the problem as one of overcoming outdated laws and business cultures.

"The first hurdle to cross is to convince regulators that this is not just some onerous process imposed on poor people.

"And it's not just that people like to pay in advance. They like having the information, It allows them to budget. When you give choices and information to customers, they like it. But you'd be surprised about the number of utilities that have an impossible time believing that."

Janet Penz adds her experience at Schlumberger: "Some states prevent nonpaying customers from being turned off in the winter, reducing one of the benefits offered through prepayment meters (em minimizing bad debt.

"Gas utilities that are able to mold corporate culture, like Peoples Gas, have overcome the hurdle of relighting pilots when the valve closes. [We] look forward to implementing a large-sale prepayment system with Peoples Gas as soon as the legislative issues have been overcome."

Installations Worldwide

The UK natural gas industry has been using smartcards "for a number of years now," says Powell, "with an installed base approaching one million." Smartcards are "fairly new" in the electricity sector, however. Powell cites "a supplied base of approximately 150,000."

Powell says Siemens has supplied in excess of one million units worldwide. Penz describes Schlumberger as the "world leader" in prepayment systems, with over 1.5 million prepayment meters installed in