Evaluating the impact of utility company billing plans on residential energy consumption

Abstract

Many utility companies offer their customers the choice of participation in an average payment plan, which enables them to pay a fixed sum for their utility bill each month (with final settlement at the end of the billing year), instead of the conventional “pay as you go” billing procedure. Because customers on average payment plans are protected from paying large bills during peak energy-use seasons and because the information about monthly energy use and its cost is perhaps less salient to them, it was hypothesized that customers on the average payment plan would use more electricity than customers not on the plan. Using a nonequivalent control group design, the electricity consumption of a selection of customers of two utility companies (Ns = 475 and 74) was examined. The results showed that there was no evidence to support the hypothesis. Since the logic of hypothesis testing does not permit the ready acceptance of the null hypothesis, several procedural, methodological, and statistical points were made to buttress the conclusion that the average payment plans had no effect on electricity consumption.