Propane Payment Plans

As we make the transition from cold winter weather to warmer spring and summer weather, this is a good time to start planning for the 2015/2016 winter heating season.

Perhaps the cost of propane was higher than expected through the past winter.  If so, this may have caused some propane consumers to consider a program to help ease the burden of paying for residential propane heating fuel.

Many propane suppliers offer propane payment plans to spread the cost of propane for a winter heating season over the entire year.  Some propane suppliers refer to propane payment plans as ‘budget propane payment plans’ or ‘level propane payment plans’.

The following outlines the basics of a basic propane payment plan:

A propane consumer with an acceptable credit history with the propane supplier will work with the propane supplier to estimate the average annual propane consumption (gallons) for a typical winter heating season.  Factors will include past consumption history, the installation of new propane appliances, the count of occupants in the home changing (less showers, less hot water, etc.) among other factors.

With an estimate of average propane gallons purchased for a typical winter season, the supplier will then apply some calculations including estimating the average propane price per gallon for the customer account for the following winter.  The goal is to estimate the total annual propane cost for the following winter.

The propane supplier will then divide the total estimated cost of the propane by 11 months.  This gives the propane consumer time to build a credit balance on the account by making monthly payments year around, starting in the spring/summer period.  Rather than paying for each individual propane delivery during the winter season, the consumer will have a credit balance and continue to make monthly payments to the supplier to complete the 11-month payment cycle.  The final month of the annual cycle is typically used to make an adjustment to bring the balance back to zero.  In other words, the consumer may need to make a final payment if money is due or may get a credit balance to be refunded or used as a credit to start the next 11 month cycle.

A propane payment plan can be very helpful to help families avoid the burden of paying high invoice balances following each individual propane delivery during the winter heating season.  A propane payment plan simply helps families pay for winter season propane year around through an annual payment cycle.

Return to Home Page