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Gas & Electricity guide

What is an energy budget payment plan (aka Equaliser or Level Pay)?

What is an energy budget payment plan (aka Equaliser or Level Pay)?

An energy budget payment plan is a payment method which allows customers to spread the cost of their annual energy bills over 12 equal monthly instalments.

Many energy suppliers now provide the option of a budget payment plan. All work in a similar way but go by different names. 

The Bord Gáis budget payment plan is known as Level Pay, Electric Ireland’s is called Equaliser while Energia's is called Fix Pay

How do budget payment plans work?

Energy bills are usually calculated based on the amount of gas and electricity used in the previous month or the previous two months if you get billed bi-monthly. This can lead to big swings in how much you're paying for energy at different times of the year, making it difficult to budget effectively.

Enter budget payment plans, which are energy suppliers’ way of removing the unpredictability from your energy bills. 

When you sign up to a budget plan, your supplier will estimate your bill for the next 12 months based on the amount of energy you used the previous year calculated at today's unit rate. They'll then add a tolerance figure to your estimate.

What is 'tolerance'?

Your supplier will add a percentage on top of your estimated annual bill to allow for unforeseeable increases in your consumption, due to abnormally cold weather or the purchase of a new appliance for example. This amount is called a ‘tolerance’ and can be as high as 20% with some suppliers.

The good news is that a ‘tolerance’ is merely a safety net. If your actual bill turns out to be less than or greater than the estimate, you can carry the surplus (or deficit, as the case may be) over to the following year, and it will be factored into your new annual estimate. If your consumption estimate is over €200 (or €250 with Airtricity) greater than your actual annual usage, you'll be refunded the extra payment.

Once 'tolerance' is factored in, your estimated bill for the year is divided into 12 equal amounts, which are each paid on a monthly basis, thereby removing the fear, unpredictability and shock that energy bills often bring.

Are there any catches?

Not really, but it's important to remember that budget payment plans won't save you any money over the course of a full year - you'll still pay for what you use - the cost is just evenly spread out.

Also, suppliers reserve the right to increase (or decrease) your monthly payment amount if it looks like the initial estimate was wrong. For example, Airtricity will review your plan every four months and adjust your bill if necessary. However you'll always be informed of any changes to your bills in advance to avoid those nasty bill shocks.

One watch out: if you live in rented accommodation and share with several people, a budget payment plan might not be right for your household. This is because you could receive a bill for underpayment at the end of the year, by which stage the renter who was living in the property when the underpayment occurred may have moved on. In these situations, paying each month for exactly what was used might be better.    

How do I pay?

Once you’re on a budget payment plan, your estimated monthly consumption will be paid by direct debit. You'll then receive a monthly bill detailing your usage, unit rate and account balance just like normal.

How do I sign up to a budget plan?

Signing up to a budget plan is completely free with all suppliers and more and more people are taking up the option. Currently, if you're a Bord Gáis customer you must choose this payment option though. 

Before getting in touch with your supplier to sign up, it's recommended that you ensure your account isn’t in arrears and that you check your meter reading. This will allow you and your supplier to make as accurate an estimate as possible, which is in everyone’s interest.

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