Press Release

PUC Outlines Budget Billing Program

Published on 6/1/2006

Filed under: Electric Gas

HARRISBURG—The Pennsylvania Public Utility Commission (PUC) today outlined the elements of an acceptable budget billing program for electric and natural gas utilities. 

“Budget billing has become a key tool for customers to mitigate spikes in utility bills and for utilities to manage account receivables.  Programs should be standardized across the industry to optimize both the customers’ and companies’ ability to manage high prices during high-energy usage months,” said PUC Vice Chairman James Cawley.

Budget billing allows consumers to pay similar amounts each month. Budget billing eliminates the peak bills consumers receive during high-energy usage months by spreading the payments out over a greater period of time, making the amount due each month more predictable and affordable. Budget billing does not affect the total amount consumers pay each year for utility service.

The Commission voted 5-0 that the following elements are essential to an acceptable budget billing program:

• Budget billing must be available, on a rolling enrollment basis, to all utility customers with residential end use irrespective of the rate schedule the account is billed.
• Budget billing must be the method by which customers in arrears pay current bills while liquidating the past due amounts owed to the utility.
• Budget accounts are to be routinely monitored and adjusted at least three times per year, consistent with the Commission’s regulations to prevent large over or under collections to the extent possible.
• Natural gas utilities should adjust budget bills at least four times per year, in conjunction with their Purchased Gas Cost rate adjustments.
• The budget billing payment period must be a minimum of 12 months, with no annual true-ups occurring during the winter heating season.
• If the true-up amount is less than 100 percent of the budget amount, customers should be given three to six months to pay off that amount.
• If the true-up amount is 100 percent or more of the budget amount, customers should be given 12 months to pay off that amount.
• Any tariff provision that is inconsistent with the Commission’s interpretation of its regulation is deemed null and void.

Utility companies are allowed six months to make the necessary programming modifications, test their system, and implement a program design.

On December 8, 2005, the Commission issued proposed language on budget billing and solicited comments from interested parties.  Five parties commented on the proposal. 

The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as stewards of competition.

For recent news releases, or more information about the PUC, visit our website at www.puc.state.pa.us.

 # # #

Docket No.  M-00051925

Contact:

• Press Secretary
  717-787-5722