First, we take your total historical electricity costs (up to 12 months) and divide that total by the number of months to get the average monthly amount you paid.
We use this average amount as your "
Baseline Average Billing Amount" for upcoming bills.
Assuming 12 months of billing history, the calculation would look like this:
Then added to that monthly baseline average billing amount is a percentage of something we call the
"Cumulative Balance".
The
Cumulative Balance is simply the difference between what you've paid and the actual cost of the electricity you have used. Every month 10% of this
Cumulative Balance is added to or subtracted from your
Baseline Average Billing Amount.
Calculating your billing this way has the effect of flattening out the fluctuations in your monthly bill, while still allowing it to move a little bit to reflect changes in your monthly usage.
This way you get the best of both worlds, a monthly charge that's evened out, without getting too far away from the true costs.
To see exactly how this works over a few months' time, please select the example below that best matches your situation.
As you look over this example, you can see how the
Cumulative Balance works  it moves from the positive to the negative and back again.
But in all cases, the amount you pay each month stays about the same and is never very far from the actual cost. And if you choose to leave the program, which you can do at any time, the remaining
Cumulative Balance is simply added to or subtracted from your next monthly bill.
Let's say that based on your usage for the past year your
Baseline Average Billing Amount has been calculated to be $200. The following example shows how average billing would work over a three month period.
In January, the bill for your actual electricity usage is $285 but since this is your first month in TXU Energy Average Monthly Billing you pay only the Baseline Average Billing Amount of $200.
Here's how to calculate the January Cumulative Balance.

Your Actual Billing Amount
Amount You Pay in January
Cumulative Balance (January)
In February, the bill for your actual power usage is $220.
Your payment would be:
+
Baseline Billing Amount
10% of January's Cumulative Balance ($85)
Amount You Pay In February
Here's how to calculate February's Cumulative Balance.
First we need to calculate the "Differential" between the actual bill
amount and how much you paid in February.

Your Actual Billing Amount
Amount You Pay in Febeuary
February's Differential
Then add February's Differential to January's Cumulative Balance.
+
January's Cumulative Balance
February's Differential
February's Cumulative Balance
In March, the bill for your actual electricity usage is $170.
Your payment would be:
+
Baseline Billing Amount
10% of February's Cumulative Balance ($96.50)
Amount You Pay In March
Here's how to calculate March's Cumulative Balance.
First we need to calculate the March "Differential" (that is, the difference between the actual bill amount and how much you paid in March).

Your Actual Billing Amount
Amount You Pay In March
March's Differential
Since this is a negative number, we subtract March's Differential from February's Cumulative Balance.

February's Cumulative Balance
March's Differential
March's Cumulative Balance