My provider keeps screwing me with estimated readings in excess of $400+, when my actual usage has been consistently under $200/mo. Granted they do credit the average when they actually take a real reading, I'm not a loan company and I'm getting frustrated overpaying.
This is a common tactic of utilities recently, to overcharge and build up credit. Basically they want to hold onto your money and earn interest off it.
i'm on a 'budget' plan, where the bill is the same every month, adjusted once per year. the muni-run utility always adds more on top of estimated average bill--which i then have to pay. i always have a surplus built-up at the end of the 'year' of at least 1.5-2x the monthly bill amount. and no, they don't pay interest on the surplus, but they certainly do charge late fees and interest if you ever fall behind or don't pay for a month or two.
I think the only solution is to provide regular meter readings.