Electricity Budget Billing: Where the Difference Goes

You can pay on time and still have a shortfall

Electricity budget billing spreads the cost of a year’s power across steadier monthly payments. If your utility sets your payment at $140 and your July electricity charges come to $205, you can pay the full $140 on time and still add $65 to your budget balance. A cheaper month can close that gap. If the gap is still there at your plan’s review or settlement, your utility can collect it under the plan’s terms.

Your utility still charges its regular rate for the electricity you use. On the statement, look for the payment due and the running difference between charges and payments. For residential customers covered by Illinois Commerce Commission rules, the bill must show the budget payment and the accumulated credit or shortfall as separate line items.

Follow the balance across a year

Take a household that starts with a zero balance and pays $140 per billing cycle for a full year. The figures below are invented. The July charge of $205 could come from 1,200 kWh at 15¢ per kWh plus $25 in fixed charges, with no other fees or taxes. The table groups the bills into three-month periods and keeps the payment steady so you can see what happens to the balance.

After spring, the household is $20 ahead. Summer more than uses up that cushion, and cheaper fall bills bring the gap down again. At year-end, the household has paid $1,680 against $1,824 in charges. The $144 difference is the true-up, the amount needed to bring payments and charges into line.

If the plan collects the difference at once, the household owes $144 in addition to the $1,680 it already paid. Spread the same difference over 12 future payments and it adds $12 a month to whatever new base payment the utility calculates. If that new base were $152, the payment with the rollover would be $164. The old balance and the new estimate each account for part of that increase.

When the payment can change

Dominion Energy Virginia starts with an average of the past 12 months of bills. Residential customers need at least 12 months of billing history at their current address and must pay any balance from previous bills before enrolling. At the annual recalculation, Dominion applies an overpayment to the next 12 months’ payments. If the customer owes a difference, they can pay it in full or spread it across the recalculated payments.

For Ameren Illinois residential electric service, the filed terms call for reviews in months four and eight of enrollment. The utility can also adjust for material changes in usage or commodity costs, or an approved change in its rates. Its default year-end option rolls the difference into the next year. Customers can request a lump-sum settlement instead. If the payment changes partway through the year, compare actual charges with the payments you made to date. Multiplying your latest installment by the number of bills can give you the wrong balance.

Get a dollar figure before you leave

Ask the utility for the balance that would land on your next bill if you canceled today and the date that bill would be due. Ask how it would handle a credit, too. Dominion Energy Virginia says the actual account balance is due when you cancel and any credit goes onto the next bill. A move ends enrollment there and makes the entire balance due. Under Ameren Illinois’s electric service terms, you give notice to cancel and bring the account current with the next regular monthly bill. If you’re closing the account, the final bill includes any amount needed to settle it through the final meter reading.

If a regular electric bill is already overdue, ask what payment arrangements cover that balance before counting on budget billing. Averaging future payments serves a different purpose from paying off overdue charges. For a flat-rate estimate of one billing cycle, use the US calculator below with your kWh, a single usage rate, fixed charges and any separately entered taxes or fees. Work out the budget balance separately. Time-of-use pricing, tiers, demand charges and solar credits also need their own calculations.

On your next statement, write down the amount due and the running balance next to each other. If the gap is getting bigger even after a low-use month, ask when the utility will review the payment and whether the current shortfall would be billed at once or rolled forward.