Friday, June 6, 2008

Interest-Free Loans to Utility Companies

As a matter of principle, I try to avoid giving interest-free loans to utility companies. This may sound like a strange thing to say, but I’m willing to bet that many people who read this post are giving out interest-free loans.

When you sign up with an equal-billing plan for gas or hydro, the payments are usually structured so that you’ll pay for more than you use at the beginning of the billing year and less at the end. This means that you’re lending a modest amount of money to the utility company, but they don’t pay you any interest.

I can handle the seasonal variations in my bills, and so I just pay for my consumption each month. In theory then, I’m not lending any money to the utility companies.

Enbridge has a nice solution to the problem of me not going on equal billing: estimated meter readings. In winter my back yard is difficult to access and Enbridge estimates our consumption. And curiously enough, the estimates are usually too high.

Ordinarily, my wife and I look out for this on each bill, but we missed it for the last while. For the 5 months from Dec. 1 to the end of April, Enbridge estimated that we used 2025 cubic meters of gas. Our actual consumption for the last 6 months was 1884 cubic meters.

This difference isn’t huge, but it’s annoying to pay more than we have to. Enbridge has an online system where we can input the current meter reading to get things back on track. We won’t be paying anything on the next gas bill or two.

So, if you’re not on equal billing and you don’t want to pay for more gas than you actually use, just go online once in a while and enter the actual meter reading.


  1. My equal billing starts in the fall and so I'm usually in the red most of the time until it gets paid off in the summer. So I'm the one getting the interest free loan.

  2. Jim: My natural gas consumption is quite low in September, October, and November. I just worked out that if I had been on equal billing from September 2006 to August 2007, I would have been lending the gas company an average of $90 over this period.

    This assumes that my predicted average monthly consumption was correct. Friends tell me that they often end up not paying for one month in the summer because the payments were set too high. In this case, my average loan size to the gas company would have been $170.

    Your consumption pattern may be different from mine, but you might want to check whether you are really mostly in the red.