How Budget Billing Makes Your Utility Bills Predictable

It’s no secret thatutility billsare unpredictable, leaving many people searching for more reliable payment options.

Enter budget billing – a potential solution for more consistent monthly expenses.

Don’t let the name mislead you.

Budget billing doesn’t mean paying less for energy.

Instead, budget billing is when you pay a set monthly amount based on your average energy usage.

“Budget billing does not protect you from that, you still pay the money you owe.”

However, budget or level billing offers a more predictable planning tool to manage monthly energy expenses.

Here’s how it works.

What is budget billing?

Budget billing, also known as level or average monthly billing, provides predictability even when usage is higher.

This helps relieve the shock ofhigh electricity and gas bills.

Depending on the utility, the cost will be updated monthly or quarterly based on your usage.

You’ll receive an alert for the updated amount you owe.

If your actual electricity usage exceeds 1,000 kWh a month, you’ll owe the utility company the difference.

Level billing is not a discount for electricity.

“It’s not really a way to save money.

Using more energy meanshigher utility bills during these seasonsthan during mild-temperature seasons.

No missed payments mean no late fees and may result in a credit score boost.

If you overpaid, the excess funds may be used as a credit for future bills.

If budget billing is not an option for you, ask your utility about other available programs.

Utility companies will recalculate your average usage to determine your monthly rate.

Some companies recalculate every month while others make quarterly updates.

Yes, alternatives are available and usually support low or moderate-income households.

States like Massachusetts and Connecticut, for example, offer arrearage management plans.

It is basically a budget billing program that helps repay overdue utility bills.

AMPs can offer relief by providing income-eligible families with a structured repayment option for overdue bills.

Whether budget billing works for you depends on your preferences.

“It’s truly an individual choice and you know, it’s your household.

If lowering the cost you pay for electricity is your main goal, there are better other options.

If you live in aderegulated energy market, a low fixed-rate plan may provide more savings.

At the end of the day, high power bills are a result of high consumption.

That’s what you should target if you’re looking to save money.