Exceleron Software
Case Study: Oklahoma Electric Cooperative

Customer satisfaction soared when Oklahoma Electric began using Exceleron Software’s Prepaid Account Management System. The co-op was able to reduce expensive write-offs without the need to collect large deposits or disconnection fees, and customers embraced the opportunity to take more responsibility for their bills and electricity usage.

Company Profile

Founded in 1937, Oklahoma Electric Cooperative is a large, urban electric co-op based in Norma, Oklahoma. With more than 47,000 accounts, the co-op remains committed to its members. Managers pride themselves on operating with integrity and honesty in a financially prudent business manner while providing services that enhance the quality of life for its members.

Business Situation

Time and again, Oklahoma Electric found that its pursuit of “financially prudent” business practices often conflicted with its pursuit of high customer satisfaction. A certain segment of its customers regularly had difficulty paying their bills, resulting in costly write-offs for the co-op. Under pressure to reduce those write-offs, Oklahoma established very large deposits for new accounts and high fees for disconnections and subsequent reconnections. This created financial hardship for many of the co-op’s customers, and even prevented some potential customers from having electricity in their home.

Furthermore, Oklahoma Electric’s customer service representatives often felt that they had to be “the bad guy.” They disliked handling calls from customers who became angry or desperate while pleading for a waiver of the deposit or trying to reestablish their disconnected service. No one was pleased with the situation, yet Oklahoma Electric needed to secure a large deposit in order to guarantee that it would be paid for the electric service it provided.

Solution

Oklahoma Electric’s managers knew that there was an alternative to large deposits: if customers could prepay for their electric service, there would be no need for large deposits or fees. The co-op had researched prepay options many times in the past, but it was reluctant to implement a system that would require purchasing expensive new technology and hardware.

“Then Exceleron came along,” says CFO Charles Barton, “and said that their platform would sit between our billing system and meter system to estimate the prepay bill.” With nightly meter reading and automatic disconnects, Exceleron’s Prepaid Account Management System (PAMS) seemed to be what Oklahoma Electric had been searching for.

Benefits

Oklahoma Electric rolled out PAMS in September 2006. Since then, customers’ response to the prepay system has been overwhelmingly positive. A recent customer satisfaction survey found that 85% of the customers who were using pre-pay were “satisfied” or “very satisfied” with the system and 76% would recommend it to others.

Under the new system, customers tend to take more responsibility for their bills, preferring to make multiple small payments instead of one large monthly payment. If they are unable to pay for electricity, service is cut off automatically, but then it is restored automatically as soon as a payment is made.

In the words of Mr. Barton, “Oklahoma Electric no longer has to be the bad guy.” He explains that the prepay system has let employees step back from the collection process and put the power in the customer’s hand. “[The customers] pick how they’re notified, when they’re notified, and what balances they want to maintain,” he says. “All those things are now in their control.”

Jonna Buck, IT Services Supervisor, notes that the use of the prepay system has reduced the volume of calls received from customers who used to request special payment arrangements or argue about service disconnections. “This is a benefit for all customers,” she says,” because now our [customer service] representatives can service other customers.

Oklahoma Electric was also surprised to see a 12% reduction in energy use by customers who switched to prepay in the first year. A large majority (85%) of the co-op’s survey respondents said yes when asked whether they had become more conscientious and conservative about their electricity use under the pre-pay system. 

Currently about 2,000 accounts have opted for the pre-pay system, and Oklahoma Electric hopes to have 10,000 such accounts in the near future. Mr. Barton and his colleagues now regularly tout the benefits of PAMS to other electric co-ops. “We for sure think that prepaid is the wave of the future, and Exceleron is a good tool to make that happen,” he says. “We’re very pleased with our decision [to use PAMS] and we’re moving forward with it.”

About PAMS & Exceleron Software

Founded in 1999, Exceleron Software, Inc. delivers a suite of hosted customer relationship management applications, including order management, payment processing and payment processing integration, account management, notification services and web-based and interactive voice response customer interfaces. Exceleron’s special focus on the prepaid market has permitted it to gain an in-depth understanding of the unique challenges associated with this group of consumers.

Exceleron’s Prepaid Account Management System (PAMS) eliminates many of the requirements of a traditional billing model and gives electric service providers the ability to charge for usage on a daily basis. By combining information from the automated meter reading (AMR) system and customer information system (CIS), PAMS makes it possible to calculate a daily energy charge by applying the current base rate as well as the power charge adjustment (PCA) to the previous day’s total kWh usage. Once the charge is calculated, it is deducted daily from the consumer’s account, along with any additional prorated charges and taxes. This allows consumers to monitor their true daily charges and make better decisions on their daily energy consumption.