What If Utilities Offered Flat‑Rate Plans That Avoid Seasonal Bill Spikes?
A change of seasons often brings with it a host of pros and cons — whether it’s fun in the sun with water balloons or snowshoeing through a winter wonderland, we dream of the months to come. But there’s also a big money question lurking in the wings. A less endearing (but still important) aspect to the change of seasons: the spike it often brings to your power bill.
In some cases, but not all, utility providers offer what’s called levelized billing or budget billing. This means a rolling average of your past utility bills is used to create a flat-rate fee, which is applied to all of your monthly electric bills. Such states as Indiana, Illinois, Pennsylvania and California, among others, currently offer some version of this plan.
Get Creative: Best Things Under $50 That Will Lower Your Utility Bills
Start Earning: 9 Unusual Ways To Make Extra Money (That Actually Work)
One thing to note: These plans don’t actually offer any discount, but rather spread the pain around from months where utility bills might spike to those where things may be a bit easier to handle. The unpredictability of staring down an eye-watering bill when the funds simply aren’t there is reduced. Of course, should fluctuations in price or usage occur, adjustments are made on an ongoing basis to keep things fair for both the utility providers as well as customers, but this method flattens out the price volatility.
California Moves To Make Electricity More Affordable for Low-Earners
One standout example is California, where a recent change to residents’ electric bill structure added a flat fee (income-graduated to protect lower earners) while also driving down the per-killowatt-hour (kwh) price. That’s in addition to the Level Pay Plan available from the California Public Utilities Commission.
And while California residents pay some of the steepest per-kWh energy prices in the U.S., proponents of this switch say that it reduced bills for most residential customers while also cutting down on price fluctuations, as AP News noted.
With Americans paying 17% more, on average, than they were just four years ago for electricity, according to Electric Choice — and some people reporting being “absolutely crushed” by their bills in recent months — it makes sense to consider levelized or budget billing to keep things more manageable, despite rate hikes.
What Else Can Americans Do To Slash Their Electric Bills?
Forbes senior contributor Robert Rapier said that frugal renters and homeowners should really be focused on the “big three” aspects of electricity use in order to reduce your bill — heating, cooling and lighting.
And while Rapier noted that much of the price increases were beyond consumer control (with the proliferation of AI data centers being one culprit among many), reduction of consumption remains the key factor.
Buy LED Lighting
Switching to LED lighting in your home can shave off a few hundred dollars a year and LED lights are safer. They also can be programmed to display a variety of shades and colors, making them a neat way to do a little home improvement on the cheap.
Weatherproofing Can Keep Your Money From Disappearing
Keeping your home weatherproofed by sealing up cracks, maintaining proper insulation and fixing ductwork can help to drive down heating or cooling costs by as much as 20% — or even a tiny bit more.
Get Rid of “Phantom Loads”
Many pieces of consumer tech draw power even when not in use, with Rapier putting that figure at around 5%-10% of all residential electricity usage, per sourcing. Do a home audit, walk around and see what can be safely and conveniently unplugged without too much hassle. If you’re not using it, don’t let it draw power. A great way to make this even easier is via the deployment of smart plugs or power strips.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion: