Meralco Prepaid Electricity Service
Company: Manila Electric Company (MERALCO), Pasig City, Philippines
Company Description: The Manila Electric Company (Meralco) is the largest electric distribution utility in the Philippines, accounting for 50%+ of the country’s energy output, and powering the lives of over with 30 million people.
Nomination Category: Products & Product Management Categories
Nomination Sub Category: Best New Product or Service of the Year - Consumer Services
Nomination Title: Meralco Prepaid Electricity Service: Breaking Grounds in the Global Smart Grid Landscape
Tell the story about this nominated product or service (up to 650 words). Describe its function, features, benefits, and performance to date.
To meet the rapidly-evolving needs of its customers who are largely on mobile and internet, Meralco set a vision for itself: a “re-energized future by 2021 as the Philippines celebrates her 500th year since Ferdinand Magellan put the country in the world map”. To achieve this, Meralco invested on the “smart grid” – an innovation that layers information technology on the power grid, making it a two-way communications network. First to be piloted as a product of smart grid is the Meralco Prepaid Electricity Service (PRES), branded Kuryente Load (KLoad).
Early implementations of the prepaid electricity service in the UK and US were enabled either by token, coin or card-based meters with an “in-home monitoring device”. Meralco saw these options as a throwback versus the pervasive electronic loading.
Meralco thus reinvented the customer experience, taking advantage of the country’s widespread adoption of mobile telecommunications, where 91% of customers are on prepaid service and purchase of low-denomination credits via electronic loading is a lifestyle. Meralco also leveraged on its sister mobile telecoms company, Smart Communications, and piggy-backed on their wide network of retailers – more than 1 million points of purchase with 99% market penetration nationwide – where customers can top up. This integrated solution provides customers near-real time consumption information via their mobile phones and allows for convenient loading options.
On the operations side, the smart grid infrastructure improves network visibility and analysis to mitigate system losses. Time, effort and expenditure in relation to manual meter reading, bill collection, meter connection and disconnection and the overall ‘cost to serve’ are also reduced.
PRES is delivered to customers using an Advanced Metering Infrastructure that is composed of: “smart meters” (collects consumption data in 15-minute intervals), “collectors” (hubs that receive and transmit data) and a Centralized Metering System (processes customer data). This infrastructure allows near real-time data gathering and processing, enabling Meralco to provide customers with account information on demand; whereas with postpaid, they would have to wait for the monthly bill.
Since Meralco’s Smart Grid and PRES journey began in 2014, it has activated over 58,000 PRES customers with nearly 100,000 more in the pipeline for 2017. It has also attracted different customer segments – disenfranchised households with no access to electricity, families on a tight budget, lessors who want to eliminate collection risk, and government accounts that want to manage their electricity expenses. Starting 2016, top real estate developers also started subscribing their condominium buildings to PRES to be able to offer an innovative solution to clients of their condominium projects.
PRES created what Harvard Business Review refers to as shared value, by generating economic value that also produces value for society by addressing its challenges. PRES has not just enhanced customer service delivery, it has also transformed lives.
1. With no collection risk, Meralco prepaid application requirements were relaxed allowing disenfranchised households to secure their own electricity service which reduces illegal connections system losses, and fire incidents.
2. Affordable load denominations as low as $2 have made electricity affordable for cash-strapped customers.
3. Daily account monitoring via SMS helps with consumption management, resulting to savings of 15 – 20% on electricity expenses.
4. Availability of an extensive network of loading channels makes loading convenient, 24/7.
For these accomplishments, PRES has reaped local and international awards in 2015, 2016 and 2017. But more than the awards, what really validates these achievements are the customers’ appreciation of the service. Customer satisfaction for the postpaid service reached its all-time high at 8.19 in 2016. But satisfaction for prepaid is significantly higher at 8.28.
With PRES, Meralco leads the way in innovations that will inspire local Smart Grid implementations and allow the Philippines to be up to par with power industries not just in Asia, but the rest of the world. Just as Magellan put the country in the world map in 1521, Meralco will put the Philippines in
In bullet-list form, briefly summarize up to ten (10) of the chief features and benefits of the nominated product or service.
-Meralco’s PRES system design and customer experience is a first in the world, presented in the the Asian Utility Week in Bangkok (May 2017), with utilities and vendors (GE, Landys and Gyr, Red Knee) citing it as a benchmark.
-To date, Meralco has more than 58,000 PRES customers.
-2016 Gold Quill Merit award (International Association of Business Communicators or IABC)
-2016 Philippine Quill Merit award (IABC Philippines)
-2016 Stevie Asia Pacific Gold award
-2017 Asian Utility Week – Best in Customer Engagement
-2016 customer satisfaction for prepaid is significantly higher versus postpaid at 8.28. A drill down of attributes that drive satisfaction shows decline in importance for rates and meter reading; and increase in importance for customer communication and payment. Through daily communication via SMS, Meralco is able to gain the customers’ trust and change the way they view Meralco.