Estimated Electricity Bills: When Utility Companies “Wing it”

by JT McGee

In December I moved into a new apartment.

In January I have a billion more monthly bills than I did the month before. None of them are particularly large – there’s not all that much financial ruin with a moderately priced 1 bedroom apartment – but they show up in quantity.

They’re also highly annoying.

All Grown Up

So this is what responsibility is like, right? Getting nickel and dimed by everybody with too much letterhead and spare branded envelopes in the supply closet?

I’ve heard that responsibility tends to be something like that.

Anyway – of all the bills that come with the new place, there’s one that’s especially annoying. It also happens to be the largest of them all. The utility bill.

Now I should preface this with a little bit of backstory. Being a frugal dude I convinced the home girl to wait patiently for another month in order to get a second story apartment. For one, we’d have energy savings. Secondly, I don’t really like the idea of having a glass door open to a ground floor. Don’t get me wrong; our neighbors are very good people, I’m sure, but you know, paranoia and such.

So here we are in the present day and I’m convinced that we haven’t used our heater but for four or five days out of the December to January period. We used it only over Christmas, when the apartment complex shut off the stairwell heaters presumably with the assumption that most people wouldn’t be celebrating Christmas with their families in 800 square foot apartments.

Gimme $120, Fool!

All this no-heat December should have racked up some serious savings at the cost of the poor guy living below us as well as the apartment complex, which pays for the stairwell heater. There were a few days where I had to pry the girlfriend’s fingers off the thermostat to keep her from turning on the air conditioner to cool off.

Seriously. Free heat is awesome, but sometimes it’s too darn hot.

Imagine my surprise when we get a utility bill for $120. This seems outlandish, and rightfully so. The actual price of electricity was roughly $100, with $20 being the combination of taxes and flat-rate connection fees.

Electricity isn’t expensive here – I live in the ultimate source for global warming if global warming is actually man-made. Kidding. But seriously this is coal country. Electricity is practically free – at least compared to states like California.

After a little back and forth with the home girl about the utility bill she concluded that it couldn’t be right for the size of apartment and our general heating usage. I’m ashamed to admit that I was perfectly happy just to pay it, as I had already spent some time on the phone with a customer service representative from this power company. (Does anyone have pleasant telephone conversations with B2C businesses?)

Estimations, my dear

The quick end to this otherwise long story is that the utility company had estimated the reading at move-in. They did have an “actual” reading for the end of the month, however. That is to say that the month-end reading for our electricity meter was correct. As for the start reading, the company just financed it and said “ah, yeah, how about 340543 kilowatt hours?” Apparently any guesstimate was close enough.

Now, it may just be my inner skeptic but I don’t take very well to the idea that you can read the end reading but not the start. More importantly, I don’t like that the only “actual” reading is one that I can more or less confirm by stepping outside my door. The guesstimated reading is one that cannot be confirmed by footsteps – I’d have to transcend time. That’s a skill I’ve yet to master.

Speaking of skills I have yet to master, this is the part where I tell you that I am far more comfortable with finance than personal finance. Cash flows are make far more sense when they lack pay by dates, customer support lines, and pre-paid stamped envelopes.

So, if you can, help me out with this situation.

Readers,

Is this normal practice for utility companies?

Have you had a billing problem like mine?

What’s the protocol for this – should you write down the reading when you move in?

Photo by: Serendigity

{ 11 comments… read them below or add one }

LL January 18, 2012 at 13:31

Hi JT,

I think I can help. I worked in a call center some years ago for several utility, cable, and phone companies. Each winter the utility company enrolled new customers in a billing system where the bill was estimated. After six months passed a meter reader would be dispatched to record the actual. The computer adjusted this bill and credited accounts.

Most customers liked the service when they understood it. Have you asked the company about a winter bill plan?

LL

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JT January 19, 2012 at 10:25

I’ll have to check this out. Thank you.

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YoungAndThrifty January 18, 2012 at 18:04

Unfortunately this is common practice! Seems like they get away with it because not enough people know about the “guestimating” to argue. We need a comprehensive argument that will force them to do it differently.

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JT January 19, 2012 at 10:26

So I guess the solution is to call every month? Sigh. Too much work!

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LaTisha January 18, 2012 at 19:07

Smart move on the top floor apt. My first heating bill was 30 bucks for the month and I’m on the third floor. Couple that with the fact that we have an enclosed breezeway and I expect the winters to be pretty cheap. Summer is another story though, but I’ll cross that bridge when I get there. I’ve never heard about an electric company trying to guestimate the reading. I’d say that’s borderline fraud.

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JT January 19, 2012 at 10:28

We’re in the middle on the second floor; there’s three floors to the building. We also have an enclosed breezeway that is heated by the complex. It does a lot to heat the “core” of the building.

You’re further south from me, so I bet summers are horrendous any way you slice it! I’m hoping that we find the second floor to be a little cooler during the summer, but I guess it’ll be one of those things that we’ll just have to see.

It’s nice being a monopoly, huh? Not like we can go pick a new utility company. 😉

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LaTisha January 20, 2012 at 08:32

Summers are really going to suck but our blood is thinner down here so it’s not too bad. We just drink mint juleps when it gets hot and sit in the rocking chair on the porch! lol

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krantcents January 18, 2012 at 20:08

They do this estimate everywhere, but it is misleading. If you are different than the average, you get screwed.

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JT January 19, 2012 at 10:29

See, that makes no sense to me. I might as well just burn energy for the sake of burning energy. My girlfriend called to see what was up, and apparently they’re going to check it out, but, according to her, they were pretty quiet about how the whole thing works.

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PK January 19, 2012 at 12:08

Yeah, it’s common… but it’s a government enforced monopoly so what are you going to do? The only option is to not pay, let it get shut off, and restart it… which I don’t know how you’d pull that one off if it’s really cold. In college we did that in protest at a big bill from the previous tenant and ran an extension cord to the fridge/TV from the hallway – but in retrospect, that was probably a bad idea.

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World of Finance January 28, 2012 at 23:25

I remember going through a similar experience with my first apartment. I also remember when a hurricane went through Florida and the electricity was out for about a week. I heard a lot of people complaining that their electricity bills were high considering the fact that they didn’t have power for a week.

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