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Financing Alternatives in Low-Income Energy Assistance

An Evaluation of the Voluntary Heating Fuel Budget Plan

Arlington, Virginia

State financing approaches to low-income energy assistance illustrate important program trade-offs in terms of goals and efficiency. This evaluation studied the trade-offs associated with Michigan's new experimental program, the Voluntary Heating Fuel Budget Plan (VHF). It was concluded that VHF was an effective design for a particular segment of the population. Prior to enrollment. VHF participants tended to have higher fuel consumption and more bill payment problems than nonparticipants. After enroll ment, the participants did not change their heating fuel consumption. A cost-avoidance analysis indicated that by including VHF as a second program option, Michigan reduced the cost of providing energy assistance over what would have been expected under its previous monolithic approach.

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