Can a Daily Electricity Bill Unlock Energy Efficiency? Evidence from Texas

Direct Energy’s manager of policy analysis, Sam Gafford, teamed with NERA consultant Dr. Derya Eryilmaz to conduct a study on the energy efficiency implications of their prepaid electricity product, marketed today as Power-to-Go for Direct Energy’s First Choice Power brand. The results were impressive. The empirical analysis found an average 9.6% energy efficiency among prepaid electricity customers compared to a control group of traditionally billed postpaid customers.

This study’s findings are in line with similar studies done with utility customers that have found between 5% and 14% energy efficiency. Unlike the prior research, however, which focused on regulated utility prepaid programs, this study finds that the efficiency persists in Texas’ competitive electricity market. The study authors hypothesize that the energy efficiency comes from fuller customer engagement with energy consumption. Prepaid customers get daily insights into how much electricity they’ve used and exactly how much it cost them, which empowers customers to make changes to how they use electricity on a near-real-time basis.

The study has been published in an article, “Can a Daily Electricity Bill Unlock Energy Efficiency? Evidence from Texas,” in the April edition of The Electricity Journal. Or download it in full here.