Which term would you use to describe the practice of smoothing variability in monthly bills by averaging annual costs?

• A. budget billing
• B. annual review
• C. rate
• D. therm usage

Answer: (A)

Budget billing means smoothing variability in monthly bills by averaging annual costs and setting a fixed monthly payment. The idea is to estimate your total yearly energy cost and divide it into equal monthly payments, so months with heavy use (like winter heating) don’t cause sudden spikes and months with lighter use don’t cause big drops. Over the year, the payments balance out, making budgeting easier and reducing surprises. The other terms don’t describe this method: an annual review is simply rechecking figures, a rate is the price per unit of energy, and therm usage is a unit of measurement for energy consumed.