Exceleron Software
Case Study: Pee Dee Electric Cooperative

Exceleron Software’s Prepaid Account Management System has helped Pee Dee Electric Cooperative improve its customer service, giving new customers an easy way to avoid paying a high deposit to connect their electric service. Customers are now more aware of how much energy they’re using, which has resulted not only in cost savings, but also energy conservation.

Company Profile

Pee Dee Electric Cooperative was established in 1939 in Darlington, South Carolina to serve areas that investor-owned utilities deemed unprofitable. Today Pee Dee provides low-cost, reliable electricity and other services to more than 30,000 customers in Chesterfield, Darlington, Dillon, Florence, Lee, and Marion counties. In 1998, Pee Dee joined a growing alliance of electric cooperatives nationwide that have united under the Touchstone Energy® brand to prepare for changes in the utility marketplace.

Business Situation

The employees at Pee Dee Electric pride themselves on constantly seeking new ways to improve their customer service. However, as Vice-President of Member Services Lori Stuckey explains, “We kept coming up against people not being able to pay deposits, but who needed to get their lights on.” Individual customers couldn’t afford to pay the large deposit that was required in order to connect their electric service, but Pee Dee couldn’t risk the write-offs it might be faced with if it didn’t collect those deposits.

Then, in 2006, Exceleron Software approached Pee Dee with an unprecedented idea to implement a prepaid system for utility customers. It held the promise of a way for customers to begin receiving electric service without paying any high upfront costs. Pee Dee Electric jumped at the opportunity to promote good customer service while lowering its financial risk. The co-op also anticipated some conservation benefits, assuming that people who paid for their electricity in advance would have a greater incentive to reduce their electrical usage.

Solution

Before jumping on board with Exceleron Software, Pee Dee Electric researched other options for prepaid services, but they all involved extensive investments in hardware and installation. “We didn’t want to take the hardware route because of the upfront cost,” explains Doran Dennis, Vice-President of Accounting. “There was a lower cost of entry with the software-based solution, and we wanted to get in cheaply, because no one was sure what response to expect from our membership.”

Pee Dee Electric began using Exceleron’s Prepaid Account Management System (PAMS) in February 2007, making it one of the earliest adopters or prepaid services in the utility industry. Customers who opted to use the prepay service were able to avoid making the initial deposit, which averages $350 for residential customers, and instead pay just $85 to start service, $50 of which is applied to electricity usage.

Benefits

Pee Dee Electric offers the prepay system to all of its customers, although so far it is used primarily by new customers. Existing customers are welcome to switch to prepay at any time. Ms. Stuckey reports that when individuals call to request a new service connection, they are relieved to learn that they have an alternative to paying a high deposit. It may take them a while to get used to the idea of prepaying for their electricity, but they appreciate the way that it simplifies their monthly budgeting.

Customers can make payments over the phone with a credit card, or by coming into Pee Dee Electric’s office. “We’ve been surprised by the number of customers who come in on a regular basis to put $10 or $20 in their account” says Mr. Dennis. “A few come in to put $7 on their account every single day.”  Customers using the prepay system are more aware of their balance and work hard to keep their accounts out of the red. Ms. Stuckey relates the story of how one elderly customer walked through the drive-thru and dropped exactly $0.82 into the coin drawer to bring her negative balance back to zero.

This greater awareness of electricity consumption has also generated benefits in terms of energy conservation. Ms. Stuckey notes that the automatic alerts included in PAMS help customers keep track of how much electricity they’re using on a daily basis, causing them “to be more mindful and find themselves automatically conserving their energy use.” Pee Dee Electric recently conducted a comparative study and found that, on average, accounts using the prepay system tend to use 12-13% less electricity than their counterparts using the traditional billing system. Pee Dee Electric has also been able to highlight its use of prepay on the periodic reports that it files with the Department of Energy, which requires a description of the co-op’s conservation programs and their impact.

Today, Pee Dee enthusiastically recommends Exceleron’s PAMS to other co-ops throughout the region. “Our goal was to improve customer service,” says Mr. Dennis. “From that perspective, we are extraordinarily pleased. We have only good things to say about prepay and how it has helped us relate to our customers.”

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.