Recent increases in PSEG Long Island’s power supply charge have tested the utility’s efforts to stabilize a popular program known as balanced billing, but big changes on the way promise to minimize or eliminate balanced-bill adjustments.
This fall, PSEG is implementing a new approach to balanced billing that will keep the charge consistent for a year once it’s set. After six months, PSEG will contact customers whose actual charges vary widely from the preset cost to offer options for making adjustments.
Fred Daum, PSEG’s director-customer contact and billing, said the company has been mining years of customer data and working to better project future costs to make balanced billing amounts as close as possible to actual customer usage.
“We have taken a look at this program in a way it hasn’t been looked at before,” he said Thursday. “The customer is not going to go through these recalculations anymore.”
Before PSEG took over management of the electric system in 2014, the balanced billing program, which offers to divide annual bills into 12 equal payments, had been plagued by irregular fluctuations, sometimes resulting in more than three bill changes a year, PSEG said. Just under half of LIPA’s 1.1 million customers are on balanced billing.
Part of the problem was that balanced bills automatically adjusted when actual monthly usage varied by more than $3. PSEG changed it so that recalculations come only when bills change by $25.
So far this year, 24 percent of balanced billing customers have seen a recalculation and adjustment, PSEG said. That’s an improvement from the 29 percent who saw one in the first six months of last year.
Most changes this year have been in customers’ favor. For the first five months of 2016, the recalculations resulted in lower monthly bills for customers, according to PSEG. But that changed in June, when 66 percent of recalculations resulted in an increase.
Overall, PSEG says its efforts to reduce balanced billing recalculations are paying off. In the first half of the year, there were 67,816 fewer recalculations than in the same period last year, a 19 percent reduction from 2015, PSEG said.
Under the new program coming this fall, Daum said there will be a change only if customers agree to it.
“We’ll proactively reach out, give customers a call, explain [the options] and provide them with choice, if they want their amount to change,” he said.