Pre-pay electricity is the fancy name for the good old-fashioned electricity meter. Two pay as you go electricity companies, PrePay Power and Pinergy, have launched within the past year promising “greater control” over electricity usage.
WHAT IS PRE-PAY ELECTRICITY?
It operates on exactly the same principles as a mobile phone. The company will come to your home and install a meter free of charge. You buy a top-up at your local shop or online, and input a code into the meter.
HOW MUCH DOES IT COST?
Both Pinergy and PrePay Power offer the same tariffs, tracking the standard Electric Ireland rates. You also pay a standard Electric Ireland standing charge of €130 per year. On top of this, there is a €136 service charge (33 cent per day plus VAT) which is the pre-pay- operator’s margin.
WHO BUYS PRE-PAY POWER?
A relatively small but growing number of people. The Commission for Energy Regulation monitors switching in the electricity market, and both companies are clumped under the category of others. In January 2012, the number of users switching to others was 768. In April 2013 it was 4,950, easily the fastest-growing segment of the electricity market.
A large portion of this segment is landlords. The other growing component are those operating on tight budgets. “It is suitable for some customers who are managing money on a week to week basis,” said Simon Moynihan, of bonkers.ie, the comparison website.
CAN IT SAVE YOU MONEY?
Technically, no. You are paying 136 more than the most expensive electricity tariff in the market. Most players in the electricity market offer discounts from the standard rate. So, Moynihan says that on top of the service charge, you are passing up on potential savings of up to€130.
SO WHY BOTHER?
Discipline. “It makes you hyper aware of your electricity consumption,” said Moynihan. The pre-pay company will install a budget controller that tells you how much electricity you are using in a given day or week and how much you are currently using. It will also tell you how long until your next top-up. Pre-pay companies say budget controllers can result in a 20% reduction in bills.
WHAT ABOUT DISCONNECTION?
Both companies promise not to disconnect over weekends, or after working hours. You will also be offered €5 emergency credit which if used, is then recouped at the next top-up.
WHAT IF I HAVE ARREARS ON AN OLD CONTRACT?
Bill pay electricity providers such as Electric Ireland, Bord Gais, and Airtricity also install meters for customers in arrears. There is no service charge. Instead, the outstanding energy debt is added to the meter and an “affordable percentage” of each top-up goes to pay off the debt. With Bord Gais, the proportion applied to outstanding debt is up to 25%. Providers decide eligibility and generally meters are only offered to those with sizable arrears. Customers with outstanding debt can also sign up to Pinergy or PrePay Power. Yet not only will you pay higher charges for electricity, the legacy debt is still collectable and enforceable.
Keey your discounts and wise up on your consumption by buying an electricity monitor – they cost about €60. The hard part is paying heed to what it says.