A new study has found that people who use automated billing payments, where money is automatically deducted from their bank accounts to pay their electric bill, consume 4 to 6 per power than those who actually look at their bills each month. When I first saw the news, I thought study author Steve Sexton of Duke University might be up for an IgNobel prize for having produced a result that is so stunningly obvious. Remember that old business cliché, “What gets measured gets managed”? If you don’t monitor what you're using, there's little chance you will do much to control it. But there's more to it than just the obvious, and it's a problem that goes far beyond your electric bill.
Among the frugal living crowd, it's a mantra that you will save more money if you pay cash. One writes that “This direct correlation can give you a much better grasp on your finances and on where your money is going. And it will probably also cause you to step back and carefully evaluate each purchase.” Automatic billing is one step further away from having any direct comprehension of where your money is going, because it just goes poof out of your bank account all by itself.
Yet in the study it's primarily low-income people who took advantage of the autopay program because it averaged their electric bill over the year. The people with the most reason to be frugal — and to monitor their electricity use — got hosed the most.
Sexton estimates that if the results of the study of a South Carolina utility were extrapolated nationwide, the increased power consumption would be equivalent of 15.8 billion kWh, equivalent to the use of 1.5 million homes. And it’s not just electricity we're talking about. Sexton is quoted in Duke Today:
“Autopay programs are likely to have a similar effect on water consumption,” Sexton adds. “Perhaps an increase in price awareness could contribute to solving California’s water shortage. Many economists have noted that the prices California charges for water are too low, but higher prices won’t induce conservation if consumers are ignoring them.”
People should be watching their electric bills like hawks; it is one of the few utilities where it can really make a difference, particularly with time-of-use billing. With many utilities you can go online and see your consumption hour by hour, to help minimize your consumption. What you see above is what my house used on May 1. Now I have to figure out what we were all doing after 8 a.m. I will watch for a couple of days and see if this repeats. (I can do that; I'm computer literate and have a high-speed connection.)
Unfortunately, low-income people have the least access to the computers and Internet connections needed to do this. Or the time — Sexton notes that “attention itself is a scarce resource.” Autopay just makes the problem worse by making it invisible.
Related in MNN and TreeHugger: