Whenever I’ve talked about my utility bills and how we deal with them, someone usually mentions Budget Billing and asks if I’ve considered using that service. So, I thought maybe I should explain why I choose not to do that.
First, for those of you who are new, here’s what we do. We budget $200 a month for our electric bill(we have high electric rates here). When the bill is lower than $200, we put the extra money into an ING savings account. When the bill is higher than $200, we take money out of the ING account to cover it. Basically, this means that we can count on a predictable budget amount for our electric bill no matter what time of year it is.
This is similar to the way Budget Billing works, except that with Budget Billing, the electric company takes the budgeted amount per month(they come to this number by averaging your last year’s bills) and saves the excess from the cheaper months to use during the more expensive months. If there’s extra left at the end of the year, the electric company just sends you a check for the balance.
The method I’m using is almost exactly the same as Budget Billing, but it has one distinct advantage. Right now, we have $452 sitting in our electric savings account earning interest for us. If I were using Budget Billing, my $452 would be earning interest for my electric company instead. And I am not at all interested in giving them any more of my money than I have to!
Obviously, the method we use will only work if you are disciplined about setting aside the money each month. If you have trouble doing that, the Budget Billing plan could very well be the best choice for you. However, I take great delight in putting money into our electricity savings account, and there’s little chance that I’ll be tempted to go shopping with the money instead of saving it.
Jessica M Hand
Saturday 1st of August 2020
Hi Ive been looking at my bill I have budget billing on there which is $64 a month. And below that is the bill for that month which is $235. And they are making me pay the budget billing and the $235 . So my bill this month is a total of $299. Why?
charles
Saturday 4th of July 2015
where in the heck can you get an interest rate worth a poop on $450?
MarredCheese
Sunday 28th of September 2014
It depends on which utility you are talking about. For heat, the utility company is the one giving the customer the interest free loan, not the other way around. That's because winter happens to be at the beginning of the year. They allow you to pay way less during the first part of the year and then gradually pay them back over the rest of the year. In that case, budget billing gives you the most investment cash at any given moment.
Bill
Tuesday 16th of December 2014
Except that most gas companies begin their budget year in May (not January) when the gas prices are starting out low in the Spring. Therefore, they are not giving any free loans.
KATHY
Thursday 28th of February 2013
I enrolled in Budget Billing last year and it was a total nightmare. Very disasterous.. My normal bill ran approximately 170/mo during the winter months. summer months i would average normally 250/mo. my budget billing was 155/mo. i thought that sounded perfect considering the amount i normally paid. after only 3 months on budget billing, the electric company uped my bb to 231/mo and me not understanding my bill continued paying the 155/mo. after noticing huge balances i started paying more monthly on my own anywhere from 180 - 250/mo. i called them asking about bill and was informed about my bb increase and before i knew it i was somehow 900 in arrear on payment and rec'd shut off notices every month. i was sickened.. reviewing my yearly payments with them i estimated sending them (for over a year) $274/mo when in reality my bill normally ran under 200/mo. I finally paid off the 900 and immediately requested to be removed from bb. i ask for any final amount that were owed. i owed an additional $85.77 prior to being allowed to be removed from bb. i paid this immediatly and just rec'd my first "normal" bill.... the normal bill is 166.24/for the month.. back to normal; however, bge charged me again, another 85.77. i did call and they did credit but had i not called they would have rec'd an additioanl 85 from me. they are crooked!!!!! paying 274/mo for one year on bb and average less than 200/mo not being on bb.... hm, which road shall i choose? never again.... beware!!!!!!!!
Jay Meek
Thursday 1st of October 2015
You are right on the money and it's even worse than what you experienced. Yes you can get a cut off notice for the non payment of a budget billing account even if you have a credit outstanding. But there are other interesting actions that Baltimore Gas and Electric excels in:
1) The final payoff amount only accrues when you go off BB(Budget Billing) , so if you never go off the credit amount may just keep growing forever.
2) The BB payment amount is "adjusted" 4 times a year. SO it is not something you can budget afterall. Rather than run the risk of being owed money at the end of the year they have 4 opportunities to raise (or lower) the BB amount. The declines are much less than the increases. And how are you supposed to budget for that.
3) The customer can no longer go in person to BGE with issues and challenges to their version of what you owe or don't owe. It all has to be done over the phone and you might as well "pound sand." They are often wrong and will never admit when they are. Meanwhile your BB credit amount is growing by leaps and bounds until you cancel it.
4) BGE takes all the credit funds from all their BB customers and buys commercial paper yielding 4-6% short term returns for their coffers. The customers get none of that.
5) and last but not least, if you are a energy assistance customer you are forced to enroll in BB. Its a beautiful set up for BGE and means that from year to year the funds you don't contribute to satisfy you BB agreement is paid by the State of Maryland.
Janeen
Tuesday 13th of January 2009
Great Idea...that would work well for us as I set aside money for other things, but never thought of this!