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Combining the benefits of prepayment and AMR

Combining the benefits of prepayment and AMR

Revenue collection has traditionally been accomplished using conventional credit meters with regular meter reading, extension of credit to customers and normal credit collection mechanisms.

But as utilities around the world are coming to grips with deregulation, there is an increasing need for them to review existing business processes so as to make them more cost effective and customer friendly.

This process is costly, with numerous inherent problems for both the utility and the customer To solve some of the problems, new technologies are being implemented which offer benefits to both parties.

Prepayment metering is a well established technology being introduced by more and more utilities. The prime benefits include simplified and lower cost business processes, increased customer control over consumption, no credit line and no bad debt. As a rule customers welcome this technology provided it has been introduced in a customer-oriented manner. Depending on the prepayment technology being used, customers can perform all their transactions with the utility from the comfort of their home, using either their telephone or their internet connection.

Another technology gaining in importance is automatic meter reading. Despite the fact that AMR does not fundamentally change the traditional way of collecting revenue (it merely improves it by eliminating meter reading and improving accuracy) it does open up a communications channel between the utility and the customer. This allows added value services, innovative tariffs and other benefits to be offered to the customer.

The technologies are available; the strategic requirements of the changing utilities are being identified and receiving attention. Now a fundamental shift in revenue collection philosophy is required to achieve their objectives in a competitive environment.

It is often argued that AMR is a first world solution, while prepayment is more appropriate for developing communities. This is not necessarily true. Prepayment has been introduced in many sophisticated markets, with widespread customer acceptance. Combining AMR technology with conventional prepayment meters can further enhance the benefits to both utilities and consumers.


A hybrid prepayment meter would consist of a standard prepayment metering device designed to incorporate an open interface. This would allow it to connect to an AMR module. These meters could be installed on a large scale to both existing and new customers , and the operational cost savings of this technology would easily justify the investment.

The AMR capability could subsequently be added in an evolutionary manner, in order to offer advantages over and above the simple prepayment function. Some typical applications / advantages are listed below.

Added value services. The full range of added value services presently being discussed (such as load management, home automation and remote access) could be offered. The cost of the AMR add-on could be carried either by the customer, who would buy or lease the module, or by the utility, who would recover the investment by charging for the value added services provided.

Fraud control. An AMR add – on would be a requirement for reconnection of any customer who is caught tampering with the prepayment meter. The cost of the AMR module could be included in the cost of reconnection. This would allow the utility to monitor the status of the meter regularly.

Tariff incentives. A utility could offer a larger domestic user the option of a preferential tariff if the utility can assume load management functions in the house. In return, the customer would have to invest in the AMR module in order to benefit from this preferential tariff. The customer’s investment in the module would rapidly be recovered as a result of the tariff reduction.

Unattended dwelling. If a consumer has a remote holiday house, an AMR solution can be used to top up the credit in the remote prepayment meter. An Internet interface could be provided that will allow the customer to charge up the prepayment meter remotely, without any utility intervention. As an example, consider a ski chalet fitted with a hybrid prepayment AMR meter. From his home in town the owner could check the state of the meter, check the temperature, and decide to top up the prepayment meter with credit. Depending on the temperature, he could also adjust the heating system to prevent water pipes from cracking!


The philosophy behind combining prepayment and AMR is to enable the utility to become more competitive by introducing appropriate technology. This approach provides a mechanism for a utility to restructure its revenue collection philosophy, experience substantial cost savings and reinforce its competitive position.

At the same time it provides a cost justifiable mechanism for a utility to upgrade its metering and services infra-structure. In addition the hybrid solution allows utilities to implement AMR in homes where it is justified – and the customer can be co-opted to subsidise the investment in the AMR technology.