Anyone use this for their home gas or electricity bills? Does it seem fair? How does it work? Thanks.
yeah I guess it helps during bill spikes...instead of 300+ dollar summer bills, you'll pay 220 or so depending on your yearly average...but when the bills are around 100 you'll pay about 140 or 150 until you payback the deferred amount slowly. Just don't cancel the service after a long period of spikes, otherwise you'll have to payback anywhere from 500-800 bucks that was deferred during that time span.
Another issue with averaged monthly billing (or budget billing - depending on who's marketing it) is that it's still important to keep an eye on your consumption. When the energy companies calculate the average annual rate (for example, we'll say they look back at the last 12 months and determine that annualizing your usage means you pay $150 a month), they're assuming that you use the same amount going forward that you did for that prior period. So, if you know what you used for the period that they're calculating, it helps you out quite a bit. A problem many people run into is that they get used to seeing what seems like less expensive Summer bills (or if you have electric heating, less expensive Winter bills), and they end up using more energy during those periods. It will catch up to them though. The next time that the energy company does a re-average, they may be charging $170 a month instead of $150. And like Severe_Rockets_Fan noted, if you elect to leave the program, some energy companies ask that you pay a lump sum (a reconciliation of that deferred amount). So it's important to know (roughly) how many kWh you've used during the period that goes into next year's calculation relative to how much you've actually paid. If your annualized average billing comes out to $150 each month and that's what you've been paying, but you've been using energy during the Summer for 4 months at a pace of $300 each month and then decide to leave the program, that deferred amount will be pretty substantial.
I'll add that the average bill the company settles on to charge each month might still vary a little month to month because of varying TDSP charges, which are pass-thru charges from the company that owns the wires. It might even vary a lot if Centerpoint decides to bill you one month for a smart meter or something.
So basically, they take my last 12 months or so, average it, and then use that as the go-forward number. Then, if my kWh is over the presumed total for the next year, they'll keep that as an "owed" balance and average it in at the next period? Hrmmm. Seems like a great way for the companies to increase how much you spend, since you won't know the costs until the following year.
I was doing it with austin's gas company, Texas Gas? I cancelled it. They were overcharging and had a $300 cushion. My bill is usually only around $50 a month or less. If they do that for enough customers thats a good amount of interest to be earning.
Looking at it from a finance viewpoint, with the idea that it's always better to hold onto your money for as long as possible and avoid paying it over until the last possible moment: It would be advantageous for you to switch to averaged billing if your largest regular energy bills are in the early part of the year. Then, some portion of your overall payments to them get deferred (you don't have to pay them as quickly). It would be advantageous for the energy company if your largest regular energy bills are in the latter part of the year. Then, you are basically paying more to them up front for increased future costs (they get your money faster). I would look at previous monthly statements to determine the average amount paid in each part of the year, and then make a decision based on that.
We do the averaged or budget billing with our natural gas but not with our electricity and water. We used to but they (the electric and water place) were not taking out enough and when we came to the renewal period, we owed them too much money for my liking. Thus, we quit doing budget billing with them.
I'm not getting the vibe that this move would be worth it. I like the idea of having consistent bills, but not if it costs me accuracy in the billing itself. Thanks all.
I had average billing from Reliant Energy at my old house. When we moved into that house, our finances were super tight. I really liked the consistent billings. I have have no complaints. At the new house, I had to wait a year to start average billing up. But after a year I decided to switch to TXU and had to wait another year. That second year has come and gone. I have been lazy. If our budget ever got tight again I would certainly get motivated and switch to average billing.
