A new Israel Electric Corporation initiative allows customers to pay for electricity in advance.
By LEAH GRANOFelectricity 88(photo credit: Courtesy)
For many modern-day societies, an acute tension exists between public institutions and the individual over the extent to which each must assume the burden for meeting societal needs. Hardly a public policy decision is untouched by this tension as national economic programs, crime deterrence and punishment strategies and even military policies are determined with this delicate balance of responsibility assessment in tow.
Now, the Israel Electric Corporation (IEC) is piloting a new payment plan that puts the responsibility for electricity consumption squarely on the individual consumer.
Law and disorder
Under the new plan, customers will estimate their monthly electric needs and pay for their electricity ahead of time - in contrast to the current system in which customers receive a bill every two months for electricity they have already used.
IEC project manager Yossi Eilouz likened the new plan to the pre-paid phone cards offered by Israel's cellphone companies. Instead of cards, however, IEC will install a meter outside each occupant's home from which customers can pre-pay for electricity on an as-needed basis. The company imported the technology for the meter from England which also allows consumers to track the amount of electricity they have used in addition to banking their payments ahead of time.
The obvious question, of course, is what will happen when a consumer uses electricity he or she has not yet paid for? For starters, IEC has promised that it will provide every person with a guaranteed credit of NIS 50 to cover emergency situations.
In addition, Eilouz stated the IEC will operate under a policy that even when the emergency credit has been used up, it would not turn off a person's electricity during Shabbat, Jewish holidays or any time its offices are not open for regular business (including nights and weekends).
Consumers will know when their pre-paid credit has fallen to NIS 50 by a consistent flashing light and beeping sound emitted from the meter.
The IEC has introduced this plan in the hopes of offering a solution to customers who consistently have their electricity turned off because they fail to pay their bills, said Avi Pedro, manager of the IEC's collection department. Pedro argues that the meter system allows consumers to budget how much electricity they are using on a real-time basis preventing them from accumulating large unaffordable bills.
"We are hoping that the meter will prevent the long bureaucratic cycle of turning people's electricity off and then on again which takes time and causes anger and frustration," he said.
Currently, the company shuts off the electricity for an average of 500 to 600 customers a month from the 216,000 consumers it services in the Jerusalem area.
To test its objectives, the corporation is handpicking the first 100 customers for whom it plans to install the meters in their homes.
These customers are repeat offenders who generally cannot afford to pay their bills in a timely manner, Pedro said. To help them climb out of their debt to the IEC, 50 percent of each payment they make to the meter will be toward their debt and 50 percent will go towards the purchase of unused electricity.
"This is a good solution for individuals, because now they will be responsible for their own usage," Pedro explained.
Since the project was launched in late July, the electric company has installed 10 meters in the Jerusalem area and has plans to install a total of 500 in the area. Under the nationwide pilot program it has purchased 2,500 meters of which 600 have already been installed, Eilouz said.
For now, the electric company is absorbing the $126 cost for each meter.
Zev Freadman, a legal adviser with the Israel Consumer Council, agreed in theory that the concept might help the company's target population keep up with their bills. He heavily criticized, however, the financial gains the IEC will incur from the plan without providing anything in return to the customer. Freadman contends that since the company will receive money ahead of time, it should offer the customer some sort of financial benefit either in the form of interest payments, discounts or yearly credits.
"They are improving their own conditions by taking the money ahead of time, and that benefit should be returned to the customer," he said.
For privacy reasons, the company was unable to provide access to persons currently testing the meters, but Pedro noted the story of one man who hadn't paid his electric bill in two years, but was now able to budget his electricity usage on a regular basis and was consistently paying his bill.
"Our goal is to provide electricity to people, not prevent them from getting it," Pedro said.
Not everyone was as excited about the project, however. Lisa Cohen, the director of an early childhood center in Jerusalem, said she felt the payment plan would be more trouble than it was worth.
"I wouldn't do it, because you never know how much you are going to need, and you will constantly have to update your payments," she said. "I would need a chart for this to see how much electricity I was using with each appliance." (The corporation said such charts are readily available on its Web site.)
Cab Driver Shay Amler agreed, citing his negative experiences with pre-paid cellular phone cards as the reason he would not want to adopt the payment plan.
The corporation predicts the plan will be adopted by those on a tight budget, such as students, or landlords who want to avoid the hassles of bills left by errant tenants.
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