Extreme temperatures can result in extreme drama when it comes time to open your electric bill .
Thanks to seasonal fluctuations in temperature, your electric bill can skyrocket in both the height of summer and depth of winter.
For that reason, it is hard to make a monthly budget when your electric bill can vary so wildly. Some electricity providers are now offering customers a way to even out payments over time through levelized payment plans.
Levelized payment plans work by averaging out electricity costs over the course of the year. Your annual energy costs are spread equally over each month making each monthly electricity bill roughly the same. Some companies use a “rolling average” that takes your current month’s usage into account, which causes each month’s bill to vary slightly.
A levelized payment plan essentially works as a no-interest loan from your electricity provider. Each month your electric bill will be either higher or lower than your actual energy consumption costs. When it is higher (typically in the spring and fall), the difference is kept as a balance on your account. When it is lower (typically summer and winter), the difference is drawn from your balance. The program continues even if you have a negative balance because the company is assured that it will be made up with subsequent payments.Using a levelized payment plan allows you to accurately predict what you will need to pay each month so you can set your budget accordingly. If you’re living from paycheck to paycheck or having financial difficulties a plan like this can take some of the bite out of your electricity bill.
Typically, all customers in good standing can qualify for a levelized payment plan, and there is no additional charge for choosing this payment option. Some companies only allow those who have been customers for at least one year prior to participate. This allows the company to make a more accurate estimate of your future energy use based on your past year’s consumption.