2016 Asia-Pacific Stevie Awards Gold Winner – Manila Electric Company
Company: Manila Electric Company, Pasig, Philippines
Category: Award for Innovation in Consumer Products & Services
Entry Title: Transforming the Philippine Electricity Landscape with Meralco Prepaid Electricity Service
To stay ahead of the curve and meet the rapidly-evolving needs of its customers who are largely on mobile and internet, Meralco has recently invested on the Smart Grid, an innovation that layers information technology on the power grid, making it a two-way network.
As a product of this technology, first to be piloted by Meralco in 2014 is the Prepaid Electricity Service (PRES), branded Kuryente Load. PRES dates back to the early 1990s with Africa, US, and UK adopting it. The service was enabled either by coin or card-based meters with keypads, or an “in-home monitoring device” that has low-balance alerts.
Neither options are applicable to Meralco: 23% of target customers have meters installed on 3- storey high poles (designed to minimize illegal connections) and another 20% have meters in the basement of their condominium residence.
Thus, Meralco decided to reinvent PRES to suit the local situation. It is a first in the world, with the electric service integrated with a telecommunications backbone, allowing account management through mobile phones. Meralco believed that the only viable and sustainable monitoring device is the one that’s already in customers’ hands.
Meralco took advantage of the country’s advanced market adoption of mobile telecommunications, where 91% of customers are on prepaid service and purchase of low-denomination credits is a lifestyle. Meralco also leveraged on its sister company, Smart Communications, the country’s leading telecommunications company. It piggy-backed on Smart’s wide network of retailers, more than 1 million points of purchase with 99% market penetration nationwide, where customers can top up.
Meralco PRES has created what Harvard Business Review refers to as shared value by “generating economic value that also produces value for the society”.
By automating many functions, PRES allows Meralco to achieve operational efficiencies and keep up with customers’ lifestyle, with account balance and top-up transactions made available via mobile. Such a unique design has made Meralco PRES a benchmark, by vendors (GE, Landis & Gyr, Orga Systems) and other utilities, for local and global prepaid electricity offerings.
PRES is a huge relief for cash-strapped customers. By offering denominations as low as $2, electricity purchase can dovetail customers’ income, while the daily balance SMS helps them monitor and control their consumption, thereby improving cashflow.
PRES is delivered to customers using an Advanced Metering Infrastructure that is composed of: “Smart meters” (collects customer 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, which enables Meralco to provide customers with account information on demand. Customers can now monitor their account hourly or daily via mobile with PRES, whereas with postpaid, they would have to wait one month.
PRES drove customer satisfaction ratings to all-time highs:
1. Global Research standard - customer satisfaction for new product: 65% top 2 box scores PRES customer satisfaction: 91% top 2 box scores
2. Postpaid ratings: Image 81%, Trust 68%
PRES ratings: Image 94%, Trust 91%
Daily account monitoring helped customers save up to 49% on electricity expenses. Savings were used to purchase appliances they have long aspired for, such as a refrigerator or TV, translating to improved quality of life. Meralco’s brand slogan, "ang liwanag ng bukas" (the future is bright), now resonates more for the customers it serves.
PRES is the first Smart Grid project and proof of concept, for Meralco, and for the Philippines. It will pave the way for other innovations, such as an Enhanced Postpaid Service and Home Area Network, as well as shape regulatory policies for local Smart Grid implementations.
With PRES, Meralco leads the way in innovations that will allow the Philippines to be up to par with power industries not just in Asia, but the rest of the world.