Edit: HB242_Public_utilities_budget_plan_payment_increases

Markdown Content:

= HB242 Public utilities; budget plan payment increases. =

== Status ==

[https://house.vga.virginia.gov/subcommittees/H14003/agendas/5165 Labor and Commerce | Subcommittee — 1/20/2026]

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== Overview ==

=== Summary as Introduced ===
Public utilities; budget plan payment increases. Prohibits a public utility from, for any residential customer who is enrolled in a budget plan or similar billing option, increasing the amount of such customer’s monthly payment more than once within any 12-month period or without notifying the customer in writing at least 30 days before such increase takes effect. The bill defines a “budget plan” as a fixed billing option offered by a public utility whereby the total service for the succeeding 12-month period is estimated in advance and bills are rendered monthly on the basis of one-twelfth of the 12-month estimate.

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=== Patrons ===

==== House Patrons ====
• Joshua G. Cole (chief patron)

==== Senate Patrons ====
• None

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== Language ==
The language of [https://lis.virginia.gov/bill-details/20261/HB242/text/HB242 HB242] can be viewed here.

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== Proposed Amendment ==

=== Amendment ===
We have peace in the valley with these technical changes:

<blockquote>
on lines 16 through 17 strike "or similar billing option"

on line 18 strike "without" and insert "by"

on line 18 strike "30" and insert "60"
</blockquote>

These changes are a work of stakeholders reaching an agreement to find a balance for all parties.

=== Purpose of the Amendment ===
To reinforce the core policy objective of the bill by ensuring that residential customers enrolled in budget plans are not subject to mid-cycle payment increases during a 12-month budget period, rather than permitting increases so long as notice is provided. The amendment clarifies that budget plans are intended to provide predictability and stability over a full year.

Stakeholder discussions are ongoing to ensure the bill’s protections are clear, workable, and balanced for both customers and utilities.

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== Opening Statement ==

=== House Subcommittee Statement ===

Madam Chair, members of the subcommittee—

HB 242 is a consumer-protection measure focused on predictability and transparency for residential utility customers who choose budget billing plans.

Budget plans are marketed as a way to smooth costs by estimating a year of service in advance and spreading that cost evenly over twelve months. For many households—particularly those on fixed or limited incomes—the value of these plans is stability and the ability to plan around a consistent monthly bill.

This bill establishes a clear rule: if a residential customer enrolls in a budget plan or similar billing option, the utility may not increase that customer’s monthly payment more than once within a 12-month period.

The bill also defines “budget plan” in statute to ensure clarity and consistency across utilities, anchoring the concept to an annual estimate divided evenly over the year.

We are continuing conversations with utilities, advocates, and other stakeholders to ensure the bill strikes the right balance and delivers on its core purpose—protecting customers from unexpected mid-year increases while preserving workable billing practices.

I ask that the subcommittee favorably report HB 242.

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=== House Committee Statement ===
n/a

=== Floor Statement ===

Mr. Speaker—

HB 242 protects residential customers who use budget billing plans.

These plans are meant to provide stable, predictable monthly bills. This bill ensures utilities cannot increase those payments more than once in a year and must give 60 days’ notice before any increase.

It adds transparency, protects families on fixed incomes, and preserves fair billing practices.

I would ask that this bill be engrossed and moved along to its third reading.

=== House Floor (Senate Amendments) ===

HB242 has an amendment from the Senate.

The amendment removes public water and sewage utilities from the list of public utilities to which this bill applies.

I move that we adopt the Senate amendment.

=== Senate Subcommittee Statement ===
n/a

=== Senate Committee Statement ===

==== Amendment ====

We have an amendment to this bill. Speaking to the amendment.

After Line 17 insert: "C. The provisions of this section shall not apply to any public utility engaged in the business of furnishing water or sewerage facilities."

This simply pulls public utilities who do water and sewer; most Virginians are covered by water and sewage handled by their locality. This allows the small public utility water and sewer companies the ability to continue payment plans without burden.

==== Amended language ====

A. As used in this section, "budget plan" means a fixed billing option offered by a public utility to a customer whereby the total service for the succeeding 12-month period is estimated in advance and bills are rendered monthly on the basis of one-twelfth of the 12-month estimate.

B. No public utility shall, for any residential customer who is enrolled in a budget plan, increase the amount of such customer's monthly payment more than once within any 12-month period or without notifying the customer in writing at least 60 days before such increase takes effect.

C. The provisions of this section shall not apply to any public utility engaged in the business of furnishing water or sewerage facilities.

==== Bill ====

HB 242 is a straightforward and short consumer-protection bill.

Budget billing plans are marketed as a way to provide stability, estimating a year of service and dividing it evenly over twelve months. For many families, especially those on fixed incomes, that predictability is the entire point.

This bill simply says that if a residential customer enrolls in a budget plan, the utility may not increase that monthly payment more than once in a 12-month period and must provide 60 days’ written notice before any increase takes effect.

I hope it will be the will of the committee to report the bill.

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== Support and Opposition ==

=== Support ===
• (to be updated)

=== Opposition ===
• (to be updated)

=== No Recommendation ===
• (to be updated)

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== Fiscal Impact ==
There is no fiscal impact statement for HB242.

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== Possible Questions ==

=== TL;DR ===
Q1: “Does this prevent utilities from ever adjusting budget plans?” 
TL;DR: No. It limits increases to once per 12-month budget period to preserve predictability.

Q2: “Why remove the 30-day notice language?” 
TL;DR: Because notice alone does not protect customers from mid-year increases that undermine the purpose of budget plans.

Q3: “Does this affect non-residential customers?” 
TL;DR: No. The bill applies only to residential customers.

=== Q1: “Does this prevent utilities from adjusting budget plans?” ===
What’s true: Utilities rely on estimates and true-ups to manage billing accuracy. 
What’s misleading: The bill does not eliminate adjustments entirely; it limits how often payment amounts may be increased. 
Answer you can use: HB 242 allows utilities to set a budget plan based on a 12-month estimate, as they do now. It simply ensures that customers are not surprised by repeated increases during the same budget cycle. Adjustments can still occur at the annual reset.

=== Q2: “Why strike the 30-day notice provision?” ===
What’s true: Notice requirements improve transparency. 
What’s incomplete: Notice does not solve the underlying problem of instability for customers who enrolled in a plan specifically to avoid fluctuating bills. 
Answer you can use: The purpose of a budget plan is predictability over a full year. Allowing mid-year increases with notice still defeats that purpose. The amendment clarifies that once a customer enters a budget plan, the payment amount should remain stable for the duration of the 12-month period.

=== Q3: “Who benefits most from this bill?” ===
Answer you can use: Customers on fixed incomes, seniors, families living paycheck-to-paycheck, and anyone who relies on budget billing to manage household expenses benefit from knowing their utility payment will not change unexpectedly mid-year.

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== Additional Information ==

1. Budget plans are marketed as stability tools 
• Customers enroll to avoid seasonal spikes 
• Predictable monthly payments are the core selling point 
Policy implication: Mid-cycle increases undermine consumer expectations.

2. Mid-year increases create household budgeting risk 
• Unexpected increases can force trade-offs with rent, food, or medicine 
• Low-income and fixed-income households are most exposed 
Policy implication: Stability is a consumer-protection issue, not merely a billing preference.

3. The bill creates a clear, uniform standard 
• One increase per 12-month period 
• Applies only to residential customers 
Policy implication: Clear rules reduce confusion, disputes, and inconsistent utility practices.

[[Category:2026 Session]]