Budget Payment Plans
Many Alberta energy retailers offer their customers budget billing or equal payment plans. Under these plans, energy costs are averaged over 12 months and the customer is billed an equal amount every month. Consumers may find the stability of a "fixed" monthly payment amount helps to ease the financial strain of high-cost winter months. Read the tips below to find out more about budget billing/equal payment plans.How budget amounts are set
Most retailers use a formula consisting of
- previous average energy usage based on daily, monthly or annual consumption
- average distribution charges for the past year
- forecasted gas and/or electricity prices for the next 12-month period
Building Credit
Be mindful to watch your account balance as of billing or actual account balance. Some budget payment plans let you build credit over the summer then use this credit in the winter when your actual energy charges are higher than your budget amount. Budget plan amounts still have to be paid monthly even when you have a credit balance.
Owe through winter and catch up over summer
Other budget plans allow you to owe during the winter and catch up in the summer. Watch your balance closely in the winter months. If the balance owing becomes three or more times higher than your budget amount, you may want to contact your retailer and ask for an increase in your monthly payment.
Credit Balance
Alternatively, if you start to accumulate a credit prior to the end of the budget year, you may wish to contact your retailer to have the budget amount decreased. Or you may even request to skip a budget payment if your credit is large enough.
Always pay the requested amount on your statement
Most retailers use an automated computer billing system designed to expect the exact budget payment amount. Not making a payment could cause credit actions to begin. Credit actions may include late payment fees or disconnection notices even when the actual account balance is a credit.
A good rule of thumb is to contact your retailer and tell them if you're planning to pay more or less than your requested budget amount.
What happens if you pay more then the requested amount?
The billing system thinks you are "prepaying" your next month's budget request when more than the requested amount is paid. It will not apply your extra money to the account balance. Instead, the billing system will request a smaller amount due in the following month's budget request. Be sure to contact your retailer if you are planning to pay more than your requested budget amount.
Total Account Balance as of Billing is due when you are on a budget payment plan and you close your account
This can be particularly difficult to manage if your balance is very high when you close your account. Most retailers offer payment agreements in these circumstances, but you must contact them to make arrangements or credit actions will occur. Types of credit actions include phone calls and letters asking for the outstanding balance.
Your budget billing will not be transferred when you switch from a regulated retailer to a competitive retailer or vice versa
It is not possible to transfer your budget balance between two companies even when retailers have the same parent company. Examples of regulated and competitive energy retailers with the same parent company are Direct Energy Regulated Services and Direct Energy (competitive retailer), and Enmax Power Corp. (regulated retailer) and EasyMax (competitive retailer). For legal reasons, regulated and competitive retailers cannot share information. Any amount outstanding in your Actual Account Balance will become due when your new contract or regulated service begins.
New retailer means no budget payment plan for one year
This option applies when you are living in the same residence and are changing energy retailers.
Your new retailer may not be able to offer you a budget plan agreement until they have recorded one year of your home’s energy distribution usage. One way around this situation is to contact the distribution company yourself and ask for your home's past 12 months' energy distribution figures. Once you have the data, contact your new retailer and ask if this information can be used to develop a budget payment plan.
Delay or Skip Monthly Payment
If you encounter financial difficulty and need to delay or even skip a monthly payment, you MUST contact your retailer to advise them and make suitable payment arrangements.
If you do not pay your budget amount on time every month, you are at risk of being removed from the budget payment plan
Retailers offer the budget plan as a courtesy to help customers manage their monthly expenses. Payment is not optional, and must be made consistently each month. The retailer may cancel your budget privileges if you miss one or more budget payment(s). Should this happen, your entire account balance will become due. This can be particularly difficult to manage if your balance is quite high. Once removed from the budget payment plan, retailers will not allow you to reapply for this payment option until all outstanding charges have been paid and the account is at a $0.00 balance.
Retailers display budgets and balances on your monthly statement in a variety of ways
If you are unsure how your balance is being calculated each month, contact your retailer and ask for an explanation. Payment programs offered by various retailers are optional. There are no regulations or laws regarding how this information is presented on your statement.
