Coming from another country, I always wonder why the two utility companies I have here in the UK, Thames Water and Octopus Energy, would calculate an amount that they think I should pay monthly, instead of just charge whatever I used last month. To me, the latter way makes much more sense and is the standard practice in the countries I lived before.
The amount they calculated seems to generate either a huge credit balance, or a huge underestimation. Thames Water changed my monthly bill from £29 to £7, and then to £17 over the course of a year and a half. Octopus Energy built up more than £200 of a credit balance (not sure if it's a result of the UK government energy gift credit last winter), then set a minimal amount of £61 monthly. They say the purpose is to make sure that the credit balance would be always be more than £100. Okay...but why? If I want to save money, I'd go to a bank.
I could see that it might make sense if the measurement is not as easy or accurate, but come on, it's the 21st century and the meter shows me my energy usage by the hour, surely they can calculate the exact amount rather than pull a random number out of nowhere?
The idea with energy is that you pay the same year round, so you don't get hammered by bills in the Winter.
Seems a bit... paternalistic and the fact that it leads to them having a tonne of our cash is hardly a coincidence. They likely make more money from investing that than they do from their core business (see also: the insurance industry).
You have the option of doing average billing in the US but we just pay based on usage. Most of the other plans with promotions or discounts ended up being more expensive when I ran the numbers in my case.
I had quarterly-averaged bills when I had housemates. It was easier to pay for the two months of heater usage over six months of bills than deal with the spike.