Smart Prepaid Energy Metering System: A More Efficient and Inclusive Mechanism in Colombia

This chapter analyzes the impact of advanced metering infrastructure on the consumption and household budget of the poorest families in Colombia. It uses data from one of the largest utility companies in Latin America, Empresas Públicas de Medellín (EPM) between 2010 and 2017. Using descriptive statistics and econometric techniques, we found that users who switched from a postpaid to a prepaid billing system reduced electricity consumption by 14.3% on average. This reduction in energy consumption is not different from the reduction experienced by other markets that have implemented the prepaid electricity program. It is important to note that although the objective of implementing these programs is to benefit low-income populations, the vast majority of which are part of non-formal jobs, the decrease in energy consumption has led to a drop in using fossil fuel generation in markets where its generation mix has a high component of greenhouse gases such as CO2.