Higher costs just now hitting CoServ Members on Budget Billing
CoServ Members paid higher electric bills over the summer because of record-breaking temperatures and higher wholesale electricity prices. However, most Members who were enrolled in Budget Billing didn’t feel the effects of this until their accounts were reconciled in October.
- Members on Budget Billing likely were underpaying each month while accruing a debit balance. Each April and October, accounts on Budget Billing are reevaluated based on the last 12 months of usage and the debit/credit they built up.
- The new Budget Billing Amount goes into effect every May and November.
- The latest recalculation in October took the combination of higher electric usage – due to high temperatures over the summer – and a larger than normal unpaid debit amount and added it to the monthly amount Members must pay for the next six months.
Let’s break this down a little more. Let’s say a Members Budget Bill amount is set at $200 per month from May through October. This amount is based on their previous 12 months of history and includes any debit/credit amount leftover from their last reconciliation.
Now, in June they had a bill for $150. This would mean they overpaid by $50, creating a credit on their account.
However, for July their bill was $350 because of higher energy costs and higher usage. This would mean they underpaid by $150.
The difference of these two bills with their Budget Bill Amount included would create a debit balance of $100 that they have underpaid. If you were to do this for all six months where many bills are higher than normal, the debit that is left owing will be larger than what Members enrolled in Budget Billing typically experience.
This Budget Billing example shows an October bill with a new Budget Billing amount.
- Amount Due shows that the Member paid $150 per month from April 2022 through October 2022.
- Balance Forward shows the total debit amount that carried forward AFTER the most recent $150 payment. That means that by paying the normal Budget Billing amount of $150, the Member underpaid by $466. Every April and October, this amount is divided by six and then added/subtracted to the average bill amount for the last 12 months to calculate a new Budget Amount.
- Current Electric Charges shows the actual amount that WOULD have been due for October if the Member wasn’t on Budget Billing. Instead of paying $182, the Member paid $150, which added another $32 to the total debit.
- The new Budget Amount shows what the Member will be paying from November through April.
Please note: If a CoServ Member wants to unenroll from Budget Billing, the Total Account Balance will be added to their next bill and must be paid in a lump sum.
Benefits of Budget Billing
Budget Billing is designed to make it easier for Members to budget through an extreme summer or winter by taking the higher costs and spreading them out over six months rather than having extremely high bills during the hottest or coldest months.
Most Members will experience a slight difference in their budget bill amount when it’s recalculated. This is because some months, their actual bill versus what their budget billing amount is either over or under creating a debit or credit on the account. However, in some instances like this past summer with the energy crisis that the world experienced, it created an unprecedented situation where the unpaid balance was much higher than normal creating larger budget billing amounts for the next six months.
What can you do in the future?
- We recommend that Members check their Total Account Balance periodically on their bill or in their SmartHub account so they aren’t surprised in May or November. This is especially important for those who are on Autopay and may not be aware that they were underpaying and had accrued a large debit.
- Be sure to check your April and October bills, as they will include a message with the new Budget Billing amount.
- You can make additional payments above your normal Budget Bill amount each month, to help pay down any balance before the next reconciliation period.
- Click here for tips and resources that can help you conserve electricity this winter that could help for the next time your account is recalculated in April.
On a positive note, natural gas prices were lower in November, resulting in a lower PCRF, which will contribute to savings for Budget Billing Members when the account is recalculated in April.
CoServ also partners with several social service agencies that can help qualifying Members.
Important Note: Members can unenroll from Budget Billing, however, the total debit amount owed will be added to the next bill as a lump sum rather than being spread out over the next several months.