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Levelized Billing

If heating bills throw your budget off balance, consider enrolling in Claverack’s levelized billing program. With levelized billing, your current month’s kilowatt-hour use is combined with that of the previous 11 months. This figure is then divided by 12 (the number of months in one year) to obtain a levelized total. You are billed the levelized amount, while a running balance accounts for the difference between your actual and levelized charges. In this way, the variance between billings is reduced, making your budget more manageable.

The chart below illustrates the yearly payment record of a co-op member with an electric heating system. The second column shows the actual charges for each month; the third column shows the levelized charges that appeared on the bills. (Keep in mind that consumers are billed for electricity used in the prior month.)

Month
Actual
Levelized
January
$152.16  
$124.84
February
$199.77
$124.76
March
$243.73
$135.50
April
$139.52
$141.98
May
$137.12
$143.19
June
$68.97
$142.56
July
$56.01
$137.16
August
$57.67     
$130.96
September
$49.78
$124.41
October
$50.69
$118.46
November
$79.28
$113.53
December
$102.63
$109.93

This member’s lowest actual charge was $49.78 in September. The highest was $243.73 in March. The difference between these two extremes is nearly $194, allowing for a substantial range of payments. However, by paying levelized amounts the member’s bill ranged for $109.93 in December to $143.19 in May, for a difference of only $33.26.

Levelized billing is not like fixed budget billing, where you pay the same amount each month regardless of your energy use and then make up for any shortfall or receive credit for any overpayment at the end of the year. As the 11-month time period changes each month, so will your levelized bill, therefore, the cooperative does not send an annual bill to settle levelized accounts. Instead, the system continues on a rolling basis, with differences between actual and levelized charges being settled through continued monthly levelizing.

It is necessary to have a 12-month billing history on your account to qualify for the levelized billing program, along with a current zero balance. Levelized billing is most helpful to members with electric heating or central air conditioning systems. It’s also convenient for members on fixed incomes.

For more information on levelized billing, contact the billing department at 1-800-326-9799 or 570-265-2167.

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