Standard |
 |
| Unless
an option is selected, the standard is that the monthly bill is
calculated on the amount of energy consumed (or estimated) in the
billing period and the bill is to be paid by mail or at a payment
center. |
Budget
Billing |
| Each
months utility bill will be exactly the same, with some corrections
from time to time. |
Average
Payment Plan |
| The
monthly utility bill is reflective of the average energy consumption
over the most recent 12-month period. |
Direct
Payment |
|
| The
monthly charge for energy is deducted automatically from the designated
bank account. |
Internet
Billing |
|
| With
the click of the mouse, the monthly energy bills can be charged
to the designated bank account. |
Telephone
Payment |
|
| A
portion or the entire monthly energy bill can be charged to a major
credit card via telephone; however, there can be significant service
charges for this option. |
Third-Party
Designation |
|
| A
customer can designate a "third-party" person or organization
to receive utility bills and termination notices from a utility
company. |
 |
|
Standard
Billing and Payment
The standard
for many years for calculating energy bills is to charge the customer
for the amount of energy consumed
in the billing period. Consequently, energy bills are usually
very high for the coldest month of the year and, for those customers
with air conditioning, very high during the summer months. If
the utility meter is not read each month (and this is typically
the case), then the energy consumption will be estimated based
on past usage patterns and the weather.
The standard
practice for paying bills is to either pay by check and mail to
the utility company or pay in person (by check or cash) at one
of the utility companys designated payment centers. In recent
years, utility companies have decreased the number of payment
centers and some utility companies have, in fact, completely eliminated
payment centers.
Utility companies
offer a number of options in terms of how the monthly energy bills
are calculated and options for paying the bills. Whenever an option
is selected, the customer is never committed to continuing with
that option for either bill calculation or bill payment. A customer
can always choose to revert to the standard or select a different
option at any time.
The specific
options for bill calculations and bill payment vary from one utility
company to another. Contact your electricity and gas utility companies
to inquire of the options available to you and the specific details
of each option. Some utility companies require that your existing
account must be paid in full before you can select a different
billing or payment option.
|
Budget
Billing
Residential
customers have the option of contacting their electricity and
natural gas companies at any time to request budget billing. With
budget billing, each months bill will be the same and surprises
of really high bills in the winter or summer are eliminated. The
amount paid each month is based upon the average electricity and
gas consumption during the prior 12-month budget cycle when enrollment
began in the program.
The company
may adjust the utility bill four times per year up or down
depending on the customers use. At the end of 12
months, there is a "true up" charge or credit applied
to your account. Customers will be charged if they have used more
than what they have paid for with the monthly bills. They will
receive credits if they have used less than what was paid.
The concept
of budget billing is like an escrow account on a home mortgage
for paying taxes and insurance. Budget billing is a free service
provided by some utility companies.
|
Average
Payment Plan
Average Payment
Plan is very similar to budget billing, although each monthly
bill is not exactly the same. Instead, each monthly bill is based
on the average of the actual amount of electricity or gas used
during the past 12 months. Each time a new bill is prepared, the
monthly amount is updated based on the average consumption of
the most recent 12-month period. The amount of the monthly payments
will vary slightly from month to month, but there will be no significant
changes associated with peak heating and cooling months. The monthly
bills are representative of actual energy consumption so there
is no need for a "true up" charge or credit each year
as required with Budget Billing.
Average Payment
Plan is also a free service of some utility companies. The customer
pays only for the energy used.
|
Direct
Payment
Utility companies
offer a free service to allow customers to have automatic direct
withdrawals from the designated bank account to pay the utility
bills. Each customer will continue to receive the regular monthly
statement from the utility company on the normal billing date.
The advantages
of Direct Payment are obvious with respect to eliminating expenses
for the costs of checks and postage. Furthermore, customers do
not need to spend time writing and mailing checks or waiting in
line at a payment center. In addition, direct payment eliminates
late payment charges as well as the stress of worrying whether
each utility bill will be paid on time each month, even when away
from home. Direct payment can be used in conjunction with Budget
Billing and Average Payment plans.
Although direct
payment is a free service provided by utility companies, be sure
to inquire whether the bank will assess any service charges, either
for initialing setting up the direct payment arrangement or for
processing each monthly withdrawal.
|
Internet
Billing
If internet
billing is selected, the utility company will send an e-mail providing
the energy consumption during the billing period, the amount due,
and the date the payment is due. With the click of a mouse, the
customer can charge the monthly energy bills to the designated
bank account. There are no checks to write, no stamps to purchase,
and no trips to the mailbox or post office. The utility company
will send an additional e-mail confirming that the payment has
been received. Registering for internet billing can be done on-line
by providing the utility account number, the bank account number,
and the bank routing number.
|
Telephone
Payment
An additional
payment option for paying electricity and gas bills is to charge
the bills to a credit card. Utility companies participating in
telephone payment plans specify which credit cards they will accept;
generally utility companies accept most major credit cards such
as VISA, Master Card, and Discover. The typical arrangement for
telephone payment is to call a designated phone number, then enter
the utility account number, the amount to be charged to the credit
card, and the number and expiration date of the credit card. Telephone
payment can be used in conjunction with Budget Billing and Average
Payment Plan.
CAUTION
- Transactions fees for telephone billing often are charged
and the fees can be as high as $5.95 per transaction. Furthermore,
loading many charges on a credit card may be unwise because the
interest rates charged by credit card companies on unpaid balances
can be as high as 25% per year!
|
Third
Party Designation
A customer
can designate a "third-party" person or organization
to receive utility bills and termination notices from a utility
company. It is important to emphasize that the "third-party"
person or organization is not responsible for paying the
utility bills or taking action on the termination notices. However,
the "third-person" may be able to assist with making
payments and to identify community resources to assist with payments
and to ensure that no person will be left in the cold. This program
is especially beneficial for consumers who are frequently away
from home, incapacitated, forgetful, or unable to understand the
details of billing information and termination notices received
from the utility companies.
|