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What is Average Billing Utilities

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Are you on average billing with your utility companies?  Cranking up your A/C in July and August is a MUST here in Kansas, and elsewhere in our great nation as well.

What is Average Billing

Why do you want average billing? The answer is quite simple: Budgeting.

There is no other real benefit to average billing apart from budgeting purposes.  Before Paul and I moved to our new home in 2012, we lived in a home built in the early 50’s. Between you and me, I think the air conditioner was also from the 50’s. It was army green and it sounded like a jet engine and the coolest we could get our home was right at 79 degrees.  And that was on a good day.

Our highest electric bill at that house was around $600. IN ONE MONTH. And I about died.

In the winter months, when you air conditioner isn’t cranking out the cold air, your bill is much lower than in the summer months.  Average billing takes your last 12 months into account, they add up all of the charges and average the bill out to make your bill a constant amount every single month.

For example, if your monthly bills are as follows:

Jan: $50, Feb: $50, March: $50, April: $50, May: $75, Jun: $100, Jul: $150, Aug: $200, Sept: $200, Oct: $150, Nov: $75, Dec: $50.

Total for those TWELVE months: $1200

Now take that $1200 and divide it by twelve = $100 per month every single month. See? Great for budgeting.

Instead of paying the $200 bills in the summer, you know that they will be $100, no matter what.  Until they reassess your account, that is.  It may fluctuate slightly based on your usage. If you crank your A/C up, that will be reflected when they assess your account.  Say you actually used $1500 instead of the projected $1200.  They will adjust (raise) your average bill to compensate.

Like I said, this doesn’t necessarily mean you’ll save any money.  Not a single penny in fact.

How average billing works

*The utility company averages your monthly bill from the past 12 months’ usage
*The average is adjusted as time goes along (ie: you pay less or more based on usage)
*The amount owed may vary slightly, but typically by only a few dollars
*The best time to enroll is in the winter, when your bill is the lowest
*It is a FREE service! They are just offsetting your bill, not eliminating any charges
*If you have less than 12 months’ history at your current address, it will be estimated
*If you move, you are responsible for closing out and paying the difference (if applicable) on your account
*Make sure you monitor your bill every month

Is Average Billing for you? If not, why not?  My favorite thing about average billing is the ease of budgeting.  No surprises when I open my mail – especially in July, August and September.  YIKES!

See also: 33 Ways to Lower Your Utility Bills – Without Spending a Dime

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