Average Billing

What is Average Billing in Energy?‍

Average billing, also known as budget billing or balanced billing, is a payment plan offered by energy providers to help customers manage fluctuating utility bills. Instead of paying the actual cost of energy consumption each month—which can vary greatly depending on seasonal changes—customers pay a consistent, averaged amount. This smooths out spikes in high-usage months, making budgeting easier and reducing the financial stress of unpredictable bills.

How Does Average Billing Work?‍

When you enroll in an average billing plan, your energy provider calculates an estimated monthly payment based on your historical usage over the past 12 months (or a similar period). This amount becomes your fixed monthly payment. Periodically—usually every 6 or 12 months—your account is reviewed to reconcile the actual cost of your energy use with the amount you’ve paid. If you’ve overpaid, you’ll receive a credit; if you’ve underpaid, the difference will be added to your next billing cycle or spread out over future bills.

Example of Average Billing in Action‍

Suppose your energy bills typically range from $100 in cooler months to $300 during peak summer usage. By enrolling in average billing, your provider calculates your average monthly cost as $200. Instead of fluctuating bills, you pay $200 every month, regardless of your actual usage. After a year, your usage is reviewed. If your actual energy costs total $2,350, you’d owe $150 ($2,350 - $2,400 paid) in the next billing cycle.

Conclusion‍

Average billing is a practical solution for managing energy costs, offering predictability and helping customers avoid bill shock during high-usage months. It’s ideal for households looking to balance their budget without worrying about seasonal spikes in energy usage. Contact your energy provider today to explore how average billing can bring consistency to your utility payments!

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