10 Reasons why you should not Budget Bill
Budget billing is a payment plan with your utility company to even out your monthly bills throughout the year. Although it sounds like a great idea, there are some disadvantages.
- Administrative fees – Some plans charge administrative fees which add to the total cost of your monthly bill.
- Fuel assistance – Low income customers who would normally qualify for fuel assistance to help with energy bills may not qualify if they use a budget billing plan.
- Balance due – If your energy bills for the year exceed your monthly payments, you will be required to pay the balance due. This defeats the purpose of budget billing and creates a real hardship for some customers on fixed incomes.
- May not be eligible – All budget billing plans are different but some may require a minimum 12 month billing history with the current utility company. If you recently moved to the area or have a bad credit history, you may not qualify.
- Strict payment rules – There is little patience for delinquent payments under most budget billing plans. Paying your bill late may result in being disqualified from the budget billing plan or having your power shut off.
- Quarterly adjustments – Some utility companies will adjust the monthly budget billing amount on a quarterly basis, so if you were planning your budget on a set amount for the full year be wary, it may change.
- May not get refunded – The hope is that if your payments exceed the amount of power used throughout the year that you will get a nice refund. Depending on your contract, that may not be the case.
- Moving – Depending on the timing and terms of your contract, there could be complications and extra fees if you plan on moving.
- Complicated contracts – Make sure you read the contract very carefully and understand all the terms and conditions.
- No Savings – While budget billing will even out your monthly bills you will still end up paying the same rate for your energy use as you would have if you were not signed up for budget billing.
The only way to truly lower your utility bills would be by enrolling with a Registered Energy Supplier like Realgy Energy Services. Check out Realgy Energy Services rates for June 2012 and see how much you could be saving www.realgyenergyservices.com
What is budget billing?
Many utility companies offer a budget billing plan to their customers. This basically means that you will end up paying a set amount each month for your utility bill. Your utility company will generally take an average of your past energy usage and estimate future gas or electric costs to come up with your monthly set amount. While this may seem like a great idea, you should carefully consider several things before enrolling.
First you should find out if a refund or credit will be issued if less energy is used. Some utility companies may not issue a refund if less power is used than planned. Additionally you may need to set aside extra money to cover the cost after the settle-up if more energy was used than the utility planned for.
Second you should also look at administration fees associated with the service. Many will charge a monthly fee. The fees will vary from utility to utility, but anything more than two or three dollars a month is too much for this service.
Third you should consider the contract that you sign when enrolling for the budget plan offered by your utility. There may be penalties applied if you move or turn off the service. For example you may end up paying extra when you move if you have used more power than was budgeted.
Fourth if you are enrolled with a Registered Energy Supplier such as Realgy Energy Services, it is important to find out if all charges will be covered under the budgeted amount. Some utilities will not allow for budgeting if the customer is enrolled with a supplier.
It is important that you fully understand what you are signing up for, check out your local utilities website before signing up for a budget plan or request to see a copy of the contract.
However, the easiest way to reduce your monthly utility bill would be to enroll with a Registered Energy Supplier to lower your energy rates, check out Realgy Energy Services rates for June 2012 and see how much you could be saving www.realgyenergyservices.com.