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LIHEAP Clearinghouse Releases Prepaid Utility Service Report

March 28, 2014 — The LIHEAP Clearinghouse has posted a report titled Prepaid Utility Service, Low-Income Consumers and LIHEAP. Prepaid service is a growing phenomenon in the United States. It allows utility customers to pay for electricity, and, less commonly, natural gas, in advance of service. Their meters track the amount they've consumed and how much money they have left in their account.

The report reviews recent studies on prepaid utility service and its status in the United States. It also details perspectives from both those supporting and opposing prepaid service. Supporters see it as a way for customers to gain more control over their energy service through convenient and flexible ways to pay bills, as well as the opportunity to spend less on energy. Opponents say it's problematic for low-income consumers because they may lose various consumer protections that are available to post-paid customers, and they may unwittingly end up with "second class" utility service. The report concludes with a set of recommendations from consumer groups to lessen the harmful impacts of prepaid utility service on the low income.

Source: LIHEAP Clearinghouse