Q: My steep utility bills in the winter and summer months always throw my budget for a loop. Should I sign up for an average payment plan?
A: Average Payment Plans (APP) can simplify your utility payments, but it’s important to understand all the facts of this option before signing up. We have answered all your questions on budget billing.
What is an Average Payment Plan (APP)?
When you sign up for an APP, the utility company will total up your last year’s payments, add a small percentage for inflation and then divide it by 12 for your monthly bill. This way, you pay a fixed amount for your bill throughout the year.
What happens if I use more or less energy than the company estimated?
If your energy usage exceeds the company’s estimate, you’ll need to pay the difference if you move or disconnect service.
If you use less energy than was estimated, the company will credit it towards your next year and possibly lower your monthly payment or you may get a refund when you move or disconnect service.
Is there a fee for this service?
Most local Topeka utility companies offer this service free of charge.
What are some pros of APP?
The main benefit of a fixed monthly utility bill is easier budgeting. APP also helps offset the high costs of summer and winter bills by averaging the energy costs of the entire year and spreading it over 12 months.
What are some cons of budget billing?
Many people who sign up for budget billing end up using more energy than they did when they paid for each month’s usage. Also, it can be difficult to cover a negative balance if you choose to move or disconnect your service.
How can I create an average payment plan myself?
Start your own budget during off-peak seasons, like autumn or spring. To get your number, total up last year’s bills, add .03% for inflation and divide by 12. Work this fixed amount into your monthly budget. During cheaper months, set aside the extra money to cover your higher bills in extreme-weather seasons.
How can I save on my energy bills?
- Only use LED bulbs. They use 75% less energy than traditional bulbs and have a lifespan that is 25 times longer.
- Get rid of air leaks. Seal all drafty areas to keep the heat in and the cold out.
- Adjust your thermostat. Changing your thermostat by just a few degrees can save you 1-3% off your monthly utility bills.
- Keep your units well-maintained. Replace your filters as necessary, keep your units clean, and consider calling in an expert at the start of each season to confirm that everything is in working order.
