Utilities' equal payment plans have flaws
The key is to read carefully and monitor any automatic payments so you can see what's going on every month.
"If you do it, I would urge you to continue to get paper bills or get an e-mail," McEldowney says.
This is especially true if you have your utilities automatically charged to your credit card.
"If in fact it's an autopayment, it gets easy to get lazy," he says.
A problem can go on for several months without you noticing it if you don't scrutinize your credit card statements. "And you can lose your rights in terms of a challenge," McEldowney says.
Tough to monitor usage
The best way to trim your energy budget is to use less. But that's tough to do with budget plans that are on autopilot, making it a challenge to calculate the real cost of a leaky faucet or an aging furnace.
"Budget billing represents the exact opposite of how companies and researchers are trying to address energy efficiency," says Joe Ridout, of Consumer Action in San Francisco. "The trend is to give consumers real-time feedback about energy."
Recent studies show that those who constantly monitor use manage to reduce energy consumption by about 10 percent.
"Consumers respond when they have more information on their energy use," Ridout says. "(Equal) monthly bills offer very little information, and yearly bills are worse."
Benefits of budget billing
Balanced billing has advantages, financial planners say. Clearly, if you can't pay massive winter or summer bills without help, it can be a lifesaver.
"Anytime you can put some regularity in your spending plan, you can plan better," says O'Neill. "The alternative is to take your annual amount" of utilities costs, "divide by 12, and do your own equal payments plan."
"I teach people to do that with other expenses, like holiday payments or college tuition," she says.
Not everyone has the discipline to do that with the
heating bill, so the utilities' plans can help.
"The nice thing with the utilities is that they do the paperwork for you. If I had the option, I'd go for it," she says.
But there are definite drawbacks, O'Neill warns. In addition to a balloon payment at year end, you could also "pay more on the front end, as plans usually start in August or September to build up a surplus for winter months with higher energy costs," O'Neill explains.
So if you'd rather use September cash for back-to-school costs, keep that in mind.