Scottish Power prepay app aims to simplify bills

mobile phone use©iStock.com/LDProd

SCOTTISH Power are to release a smartphone app that will allow their customers to buy gas and electricity in bundles.

Named PowerUp, the app will enable customers to purchase anything from one day to six months' worth of energy in advance, removing the need to sign up to standard or fixed tariffs.

The intention is to make billing much simpler, something which is perhaps necessary given the £18 million fine Scottish Power recently received for sending out late and inaccurate bills.

However, as much as the app may succeed in making customers engage more with their energy consumption, it presents the possibility that hard-up customers may self-disconnect their power.

Price

There's currently no indication of how much Scottish Power will charge people for the bundles on offer through the app.

Since it's exclusive to Scottish Power customers and available only directly through the provider, it won't be listed on any price comparison website.

As such, it will be difficult to gauge whether it provides good value for money, since it won't be easily comparable with pre-existing tariffs.

In fact, there's a worry that, because it is effectively a prepay meter, it will actually be somewhat overpriced.

Like other prepay systems, it will most likely charge proportionally more for a unit of energy than that charged by standard and fixed tariffs.

This is alluded to by Scottish Power's own suggestion that, "The bigger the package you buy the more you could save."

While bulk savings are often to be welcomed, it implies that those who want the flexibility of buying only a week's or month's worth of gas, for instance, will have to pay more.

Self-disconnections

Aside from the possibility of being more expensive on average, the app also raises the possibility of an increase in self-disconnections.

These happen to 54% of customers on prepayment meters, who sometimes choose to go without energy because they can't afford to top up their meters while still paying for food or their rent.

With the PowerUp app, therefore, Scottish Power may be inadvertently preparing the way for more of their customers to deprive themselves of gas and electricity.

As for the possibility of customers depriving themselves of energy accidentally, by simply forgetting to top up, the app sends reminder messages at regular intervals that prompt customers to buy new bundles.

As a result, there's little chance of people running out of energy simply through unawareness or absentmindedness.

Kilowatt hours

Not only is there little chance, but it seems that PowerUp really does have the potential to make most customers more conscientious about the energy they use.

We're saying to people buy it by the day, not by kilowatts or a fancy tariff you don't understand.
Keith Anderson, Scottish Power CEO

It requires them to regularly take their own gas and electricity readings, which they then enter into the app.

This enables them to keep track of how much energy they're using and how quickly they're using it. In turn, this enables them to receive an estimation of when their current bundle is likely to run out.

While these bundles are described in terms of a set unit of time (e.g. "one day" or "six months"), what customers will really be purchasing is a set amount of kilowatt hours (kWh).

These amounts are determined on the basis of an estimation of how much a customer is likely to consume within any given period of time.

Therefore, once customers have been using PowerUp for some time, they may find that "one day's worth" of energy may be higher or lower than it was when they first downloaded the app.

Accordingly, it may also cost more or less, thereby motivating them to make sure their energy consumption remains as efficient as possible.

No more bills

Beyond this encouragement it offers to be more fuel efficient, the app's biggest benefit will perhaps be its removal of the hassle of receiving and paying bills.

In light of Scottish Power's recent track record regarding this issue, this is most definitely a good thing.

They've been one of the most complained about energy providers for several years now, currently ranking 19th out of 21 suppliers on Citizen's Advice league table of complaints handling.

Much of their bad reputation comes from the billing system they installed in 2014. Suffering from a number of glitches, it sent out thousands of late and inaccurate bills, resulting in Scottish Power breaking the record for the number of complaints received by a UK energy supplier.

PowerUp will potentially reduce the scope for such PR disasters. However, at the same time, the intrinsic variability in how it determines the size of energy bundles may nonetheless invite the possibility of disputes between Scottish Power and their customers.

Depending on how often the amount of kWhs it provides for a particular period of time changes, these customers may find themselves becoming frustrated with it, disappointed that they're not receiving the same amount of energy.

The same doubly applies if the price of "a day" or "two months" suddenly fluctuates. If this were to occur often, it would possibly make budgeting for energy more complex for customers than it had been previously.

Smart meters?

Another potential issue is that the app's pricing scheme runs the risk of divorcing people from how energy is really charged: by the kWh. In thinking of energy prices in terms of days and weeks, they might become blind to rises in the actual cost of energy.

That said, PowerUp does display how much is being charged per kWh, so as long as customers remain mindful of the difference, there won't be too much danger of them thinking they're getting a good deal when the real price has actually risen.

And as long as they do remain mindful of such things then the app will have met with success, since its chief job is precisely to make Scottish Power's customers more aware of what they're doing with their energy.

Moreover, if the app succeeds in doing this, then it will have paved the way for how other energy providers engage with their customers in the future, especially if apps like it end up being combined with smart meters.

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