That's a question North Carolina regulators will soon answer in a case that challenges a popular billing option that Progress Energy and Duke Energy offer to more than 160,000 households in the state.

The state's two biggest power companies have payment plans that allow customers to pay a fixed amount each month, regardless of how much power they use. The utilities tack on a monthly surcharge of about 11 percent, which results in customers buying the equivalent of 13 months of electricity but getting 12 months of service.

Despite the cost premium, the programs have been popular: Duke Energy signed up about 20,000 customers in less than six months.

But the N.C. Utilities Commission, which regulates electric utilities, is being urged to ban the programs as bad public policy at a time when consumers are being asked to save energy to reduce greenhouse-gas emissions.

Urging the ban are the state attorney general; the Public Staff, the state consumer agency on utility matters; and N.C. Waste Awareness and Reduction Network, a Durham group that advocates efficiency and renewable energy.

"This is the kind of thing that creates a disincentive for saving electricity," said NC WARN Director Jim Warren. "This is the old utility business model: maximum sales of electricity and talking green to the public."

The Utilities Commission could rule on the dispute within 30 days. The commission approved the billing programs for both utilities as recently as 2004, but last year the regulators re-opened the case because of the concerns about energy waste. Critics said customers who pay a fixed bill regardless of usage have no incentive to turn out the lights, turn down the thermostat or otherwise conserve, because they pay the same price, regardless.

Those critics appear to be right. According to data from the utilities, customers who enroll in the program show a jump in electricity use that can approach 10 percent over three years.

Duke Energy data show that during times of peak energy demand -- blazing summer afternoons when families are running air conditioners and cooking dinner -- customers on the fixed payment plans used 31 percent more power than other households.

Duke Energy and Progress Energy oppose ending the programs. They say customers have asked for them as a convenience and are willing to pay for the service.

"It's a voluntary program," said Duke Energy spokesman Tom Pettit. "It is very popular with some customers."

By leveling bill payments, customers avoid surprises and are better able to manage household budgets. A typical household on a regular billing plan pays as little as $72 a month in May, a mild month, but can pay about $113 in September during peak demand.

"That's what customers pay for: bill certainty," said Progress Energy spokesman Mike Hughes.

Utility officials also say the fixed monthly cost is based on the past year's usage, so if customers conserve one year, their costs will be lower when recalculated the following year. If their usage rises, payments will increase correspondingly the following year. The programs have an abuse clause and terminate customers who exceed upper limits on monthly electricity use.

Progress started its balance billing program in 2004 and has signed up about 60,000 households in less than four years. Duke Energy has signed up more than 103,000 households for its fixed payment plan since 2002.

As the Utilities Commission gets close to issuing a decision, both companies are aggressively recruiting new customers for their programs.

If the commission bans the billing programs, existing customers could continue until their one-year contracts end, but they wouldn't be able to renew.