Nationwide Postal Survey of Electricity Prepayment Metering Consumers

Background

Prepayment metering is an electricity payment method often used by low-income consumers with electricity debt, or who have difficulty budgeting. Electricity Authority figures from 2008 indicate that around 3% of New Zealand households use prepayment metering for electricity, although our studies indicate this number may have increased. The cost of electricity and heating are important public health problems in New Zealand, and are likely to be particularly difficult for those using prepayment metering. Concerns have been raised about the possibility of prepayment meter users not crediting their electricity meter and going without electricity, or self-disconnecting, which may have serious health implications. Little is known about using prepayment metering from a consumer perspective in New Zealand, and this research aims to fill this knowledge gap.

2010 Nationwide postal survey

Objectives

  • To investigate the advantages and disadvantages of prepayment metering;
  • To determine the number of prepayment meter users who self-disconnect;
  • To investigate the causes of self-disconnection and the length of time households who disconnect are without electricity.

Method

We undertook a nationwide postal survey with an innovative method of participant sampling; by working with three major electricity retailers offering prepayment metering we were able to obtain a representative nationwide sample, the sample were then mailed all study information and questionnaires by a third party mailing group as the electricity companies could not share customers personal details with us. The response rate was 48%.

Results

  • The study found that while almost all respondents felt the benefits of using prepayment outweighed the risks of running out of credit or self-disconnection, 53% of respondents experienced self-disconnection in the past year.
  • Of concern, over a third of respondents experiencing self-disconnection were without electricity for more than 12 hours.
  • The frequency of self-disconnection was also high, with 17% of those disconnecting reporting six or more events in the past year.
  • Government intervention could reduce the risks and disadvantages involved with using prepayment metering, which could then support initiatives aimed at reducing fuel poverty.

2011 Follow-up Survey

Objectives

  • To investigate whether patterns of ‘self-disconnection’ within households change over time;
  • To explore the heating practices of households using prepayment metering.

Method

We undertook a follow-up postal survey in 2011 with 90% of respondents to the 2010 survey who agreed to help us again and provided address details directly to us. The response rate in 2011 was 61%.

Preliminary Results

  • Self-disconnection remains problematic over time, 45.4% experienced at least one event in the past year;
  • One third experiencing self-disconnection were without electricity for 24 hrs or more during the last event;
  • Prepayment metering encourages reduced space heating in already cold homes;
  • More than two thirds of respondents report shivering inside their home during the winter months on at least one occasion.

If you have any questions, please call us freephone on 0800 100 884 or send an email to Kimberley.