Selling Stability: A Review of the Risks and Rewards of Fixed Billing

Just as some customers are interested in alternate rates such as real-time pricing so that they can potentially get the lowest possible price, some customers are willing to pay a premium so that they have a guaranteed monthly bill. To serve residential and small business customers who want certainty about their energy bills, some gas and electricity suppliers now offer fixed billing programs. These programs shift the risk of weather, fuel cost increases, and changes in energy use to the energy provider from the customer.

To help assess the value of fixed billing programs, we interviewed service providers that assist utilities in designing such offers, as well as a representative of Georgia Power's FlatBill program. Based on results of these interviews, plus findings from our secondary research, this report reviews how fixed billing programs work, the risks faced by companies that offer them, and the steps involved in their implementation.