Prepaid Utility Service

Rethinking Prepaid Utility Service: Customers at Risk

Prepaid utility service programs and proposals are expanding rapidly throughout the nation, putting low- and moderate income households' health and safety at risk, and setting up an inequitable two-tiered customer delivery system. Additionally, many companies add lucrative junk fees to the prepaid customer plans.

prepaid-utility-report-coverDownload the full report (PDF)

Download the executive summary (PDF)

Download map of current and proposed programs in the U.S. (PDF)

Download customer service questions that states should require utilities to answer (PDF)

Download the press release (PDF)

New! Download testimony before the California Public Utilities Commission opposing a prepaid program

Revised Publication: June 19, 2012
©National Consumer Law Center

Prepaid utility service requires customers to pay in advance for their utility service through purchasing credits affiliated with a meter on the home. Once credits are depleted, service is automatically disconnected.

Typically marketed as a program to help customers reduce energy use and avoid paying a deposit, prepaid customers often pay more than traditional credit-based customers. Additionally, it's misleading to label involuntary reduction in consumption as conservation. Although the program is "voluntary," it's frequently offered to low-income customers on the verge of disconnection for nonpayment.


NCLC opposes prepaid utility service but if a state's regulatory agency allows a prepayment program, NCLC urges that a set of 11 requirements be incorporated to protect customers, including the following: