Prepayment Meters: The Low-Income Perspective Roger Colton Fisher, Sheehan & Colton 34 Warwick Road Belmont, MA May 2002

Payment troubles and low- income status Census: 32.4% of LI behind vs. 9.8% non-LI Similar state figures: –Illinois –Iowa –Maryland

The narrowing of choices Lack of payment plan option Lack of short-term arrears option Iowa LIHEAP survey –Medical care –Food –Home energy –Consumer debt

Consider the working poor 76 percent of workers in the bottom quartile of family income lack regular sick leave. 58 percent of workers in bottom quartile do not have consistent vacation leave. 78% of workers beneath the median income level cannot choose or change their starting and quitting times, or take days off to care for their sick children.

The problem of hidden shutoffs Rather than having a disconnect for non- payment, the meter simply runs out of money. Great Britain: Nearly 4 million customers use prepayment meters. One-third of gas customers self-disconnected. More than one-quarter of electric customers self-disconnected. Compare to 5% - 6% disconnect rate

Why Salt River Project is not a good comparison 58% are homeowners Average family income: $31,000 Average family: 4 persons Average customer: > 10 years

Not good economic sense Cost of meters: $7.50/mo x 12 mos = $90/year Average savings: 10% x 7,000 kWh x $0.10/kWh = $70 SRP savings only arose from aggressive energy education program.

The fallacy of “consent” in the face of disconnection Consent is vitiated by “duress” One recognized cause of duress is “economic coercion” Economic coercion occurs when consumer believes no real choice. When duress is present, no “consent” can be found.

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