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Low Income Home Energy Assistance Program Division 10 Service 415 Program 415 Chapters 05 - 65 North Dakota Department of Health and Human Services
Vendor Budget Payment Plans 415-10-10-15 (Revised 10/00 ML #2629) View Archives
Many LIHEAP recipients can benefit from participating in budget payment plans offered by all major utilities and by many other fuel vendors. However, recipients may be reluctant to participate in a year around payment plan if the amount of the monthly payments does not take into account the amount of fuel assistance received and reduce the monthly payment accordingly.
Vendors may achieve increased participation in budget plans if they will deduct the amount of the annual fuel assistance from the customer's estimated consumption cost before calculating monthly payment amounts.
The customer's annual fuel assistance benefit can be estimated by multiplying the customer's co-payment percentage times the actual heating bills from the previous heating season. Example: The vendor determines that annual consumption for the previous heating season (October 1 - June 30) was $1200. The customer is eligible for LIHEAP benefits but is still responsible for a co-payment of 50% of the heating costs. The customer's annual fuel assistance benefit would be estimated at $600. The vendor would then deduct the customer's estimated annual fuel assistance of $600 from the estimated annual heating consumption of $1200, add any additional costs for the non-heating months (July 1 - September 30), and divided the result by 12 to determine the amount the customer would pay in even payments year around.
The advantage to the vendor is that he will not be carrying large bills during the peak of the heating season when the cost of heat is the greatest, because the customer would have accumulated a credit. The customer would be able to maintain a more balanced monthly budget.
Some vendors may prefer to set up budget plans, but suspend them during the time LIHEAP is paying on the heating bills. This can also work, especially for customers whose low-income problems are short term or