LIHEAP Application & Model Plan Guide

The Two-Tier LIHEAP Application Process

LIHEAP operates through a two-tier application process. Unlike competitive federal grants where organizations apply directly to a federal agency through Grants.gov, LIHEAP funding flows through states to local sub-grantees. This means there are two distinct application processes that program managers need to understand:

• Tier 1 — State to OCS: Each state submits an annual application to OCS in the form of a Model Plan (or abbreviated Model Plan) that describes how the state will administer its LIHEAP program for the upcoming year. OCS reviews and approves the plan before releasing funds.
• Tier 2 — Sub-grantee to State: Local agencies (Community Action Agencies, county offices, nonprofits) apply to their state LIHEAP office for sub-grant funding. This process varies significantly by state and may involve a formal application, a scope of work submission, a contract renewal, or a combination.

The State Model Plan

The Model Plan is the central document governing each state's LIHEAP program. OCS provides a standardized Model Plan template that states complete annually. The plan describes every aspect of the state's program design, from eligibility criteria to benefit determination methodology to administrative structure. Understanding the Model Plan is essential even for sub-grantee staff who do not write it, because the plan governs the rules your agency must follow.

Required Model Plan Elements

The LIHEAP statute (42 U.S.C. 8624) requires that every state Model Plan include the following elements:

The 16 Statutory Assurances

The LIHEAP statute requires states to provide 16 assurances in their Model Plan. These assurances are not mere formalities — they represent binding commitments that the state and its sub-grantees must uphold throughout the program year. Key assurances include:

• Non-discrimination: The state will use LIHEAP funds without discriminating on the basis of race, color, national origin, sex, age, religion, or disability.
• Outreach obligation: The state will conduct outreach activities to ensure that eligible households are made aware of the assistance available, with particular attention to households with elderly, disabled members or young children.
• Utility coordination: The state will coordinate LIHEAP with similar and related programs including utility company energy assistance and will establish procedures to ensure that no household receiving LIHEAP benefits has its home energy supply terminated during the program year.
• Fair hearing rights: The state will provide applicants the opportunity for a fair administrative hearing if they believe their application was improperly denied or their benefit improperly calculated.
• Targeting: The state will give highest priority to households with the lowest incomes that pay a high proportion of household income for home energy.
• Administrative cost limit: The state will not use more than 10% of its LIHEAP allocation for planning and administrative costs.

Full Plan vs. Abbreviated Plan

OCS offers two submission options for the annual Model Plan:

• Full Model Plan: Required every three years, the full plan includes complete responses to all plan elements and a detailed description of the state's LIHEAP program. This is a comprehensive document that can run 50-100+ pages.
• Abbreviated Model Plan: In years between full plan submissions, states submit an abbreviated plan that describes only changes from the previously approved full plan. If no program changes occurred, the abbreviated plan can be quite brief.

Public Participation Requirements

The LIHEAP statute requires that states provide the public an opportunity to comment on the proposed use and distribution of LIHEAP funds before the Model Plan is submitted to OCS. This public participation requirement is implemented differently across states but typically includes:

• Public notice: Publication of the proposed plan in newspapers, state registers, or online portals with at least 30 days for public comment in most states.
• Public hearings: Some states hold public hearings in multiple locations to gather input from recipients, advocates, utility representatives, and sub-grantees on program design and priorities.
• Stakeholder engagement: Consultation with sub-grantees, utility companies, weatherization providers, and community organizations about program design, allocation formulas, and operational procedures.

Sub-grantees should actively participate in their state's public comment process. This is your opportunity to influence program design, benefit levels, and administrative procedures. Agencies that do not engage in the planning process often find themselves constrained by rules they had no voice in creating.

Sub-Grantee Application to State

The sub-grantee application process is entirely state-determined — there is no federal template or standard. Some states operate highly structured competitive processes, while others use relatively simple contract renewals with established sub-grantees. Common application elements include:

• Scope of work: Description of how the sub-grantee will implement LIHEAP in its service area, including intake procedures, benefit processing, crisis intervention, and outreach activities.
• Budget narrative: Detailed budget showing how LIHEAP funds will be allocated across direct benefits, crisis intervention, administrative costs, and any other allowable categories.
• Capacity documentation: Evidence of organizational capacity to administer the program, including staffing plans, data systems, fiscal controls, and physical office accessibility.
• Performance history: Prior year performance data including households served, expenditure rates, error rates, and compliance findings from monitoring.
• Utility coordination documentation: Evidence of agreements or working relationships with utilities in the service area, including data-sharing agreements and shutoff notification protocols.
• Outreach plan: Description of how the sub-grantee will reach eligible non-participants, particularly elderly, disabled, and other priority populations.

Coordination with Utility Companies and WAP

Effective LIHEAP administration requires active coordination with utility companies and the Weatherization Assistance Program. The LIHEAP statute specifically requires utility coordination, and states must describe their coordination activities in the Model Plan. Key coordination areas include:

• Utility data sharing: Agreements with utilities to share customer energy usage and payment data, enabling more accurate benefit calculations and targeting of high-burden households.
• Shutoff notification: Procedures for utilities to notify LIHEAP sub-grantees before disconnecting service to a LIHEAP recipient, allowing crisis intervention to prevent the shutoff.
• Payment processing: Standardized procedures for LIHEAP benefit payments to utility companies and fuel vendors, including electronic payment systems, account number verification, and reconciliation processes.
• WAP referral pipeline: Procedures for identifying LIHEAP households with high energy burden and referring them to WAP for weatherization services. This coordination is especially important when the state exercises the 15% LIHEAP-to-WAP transfer option.

Administrative Cost Limits

The LIHEAP statute imposes a 10% cap on planning and administrative costs. This is a federal statutory limit that applies to the state's total LIHEAP expenditures — not just the sub-grantee level. Understanding how this cap is distributed between state administration and sub-grantee administration is critical:

• The 10% cap is aggregate: The 10% limit applies to total state LIHEAP spending, including both state-level and sub-grantee-level administrative costs combined. States divide this 10% between their own administration and what they allow sub-grantees to spend on administration.
• Sub-grantee admin allocation varies: Because states must share the 10% cap, sub-grantees often receive an administrative allocation significantly below 10%. Some states allow sub-grantees 5-7% for administration; others provide less.
• Definition matters: What counts as "administrative" versus "programmatic" determines whether costs fall under the cap. Intake staff processing applications are generally considered program costs, not administrative. Management overhead, accounting, and general office costs are administrative. See the Budget & Financial Management page for detailed cost classification guidance.

Typical LIHEAP Program Year Timeline

While specific dates vary by state, a typical LIHEAP program year follows this general timeline. Understanding this cycle helps sub-grantees plan staffing, budgets, and operational workflows:

Congressional Appropriation and Continuing Resolutions

LIHEAP funding depends on annual congressional appropriation. When Congress does not pass a full appropriations bill before the October 1 start of the fiscal year — which has been more common than not in recent decades — LIHEAP operates under a continuing resolution (CR) that typically provides funding at the prior year's level. This creates practical challenges:

• Delayed funding certainty: States may not know their final allocation when the heating season begins, forcing conservative initial benefit levels that may be adjusted mid-season.
• Supplemental appropriations: In severe winter weather years, Congress may appropriate additional LIHEAP funds beyond the regular allocation. These supplemental funds often come with shorter expenditure timeframes.
• Budget planning implications: Sub-grantees should plan their initial LIHEAP program budget conservatively and be prepared to adjust as final allocation amounts become clear. Building flexibility into staffing and benefit levels helps manage appropriation uncertainty.

Application Tips for Sub-Grantees

Strengthening your sub-grantee application improves both your funding prospects and your program design. These practices help:

• Reference your prior year data: Show the state how many households you served, your expenditure rate, your error rate, and your outreach efforts. Concrete performance data builds confidence in your capacity.
• Document utility coordination: States must demonstrate utility coordination to OCS. Sub-grantees that have formal agreements or documented working relationships with utilities strengthen the state's overall application.
• Describe your outreach strategy: Explain how you reach eligible non-participants, especially priority populations. Quantify your outreach activities and describe partnerships with other organizations that refer clients to your program.
• Connect to CSBG and other programs: If your agency administers multiple programs, show how LIHEAP integrates with your broader service delivery system. Demonstrating coordination across programs shows operational maturity and maximizes the value of LIHEAP funding.
• Address prior findings: If your agency had compliance findings from the previous year's monitoring, address them directly in your application. Show what corrective actions you implemented and how you prevent recurrence.

For detailed guidance on LIHEAP compliance obligations that affect your application, see the Compliance Requirements page. For budget preparation guidance including the 10% admin cap, see the Budget & Financial Management page.