New York Commission Approves $5 Billion to Boost Energy Efficiency and Electrification in Buildings

The New York State Public Service Commission on May 15 authorized approximately $1 billion per year from 2026 to 2030 to support energy efficiency and building electrification initiatives across the state. These programs will be managed by the large investor-owned electric and gas utilities, along with the New York State Energy Research and Development Authority (NYSERDA). The commission emphasized that the initiatives would lower consumer costs and reduce emissions, advancing climate goals amid federal efforts to undermine them, such as ending the ENERGY STAR program.

The initiative will broaden access to energy efficiency and clean energy solutions across the building sector, with a focus on low-to-moderate income households and affordable multifamily housing. This will reduce fossil fuel reliance and expand weatherization activities across small homes and multifamily buildings. The commission highlighted the benefits of these projects, including reducing customer energy burdens over the long-term.

To reduce costs for ratepayers, the commission approved the use of existing cash balances for 2025 and 2026, cutting program costs by $340 million. An additional $360 million—covering nearly 24 percent of the five-year budget—will come from reallocating unneeded NY-Sun collections and interest earnings on previous ratepayer funds.

The commission’s decision also streamlines program operations by reducing redundancies and minimizing administrative costs—ensuring more funds go directly to building upgrades. Programs will be administered under a strategic framework designed to align with the state’s climate goals, including a strong emphasis on weatherization to lower energy costs, ease grid demand, and prepare customers for electrification.

This investment builds upon the New Efficiency: New York and Clean Energy Fund programs, which aim to address barriers to building sector decarbonization. By 2030, these initiatives are projected to deliver lifetime energy savings of over 615 trillion British thermal unit equivalents – the energy consumption of about 400,000 homes.

Recognizing that lower-income households face disproportionately high energy burdens, the commission noted that these investments complement the state’s existing $500 million annual Energy Affordability Program, which provides bill discounts to low-income customers. Together, these efforts aim to help vulnerable New Yorkers reduce energy costs while accessing clean energy solutions.

The commission directed the utilities and NYSERDA to detail their programs in implementation plans for review by the Department of Public Service. Utilities must submit joint plans for upstate and downstate residential weatherization programs, with budgets effective Jan. 1, 2026. Additionally, the Commission adopted a surcharge-based cost recovery method to ensure full transparency of program expenditures.

Separately, the commission ordered an increase in funding for the New York Municipal Power Agency to enhance clean energy programs, including expanded low-to-moderate income initiatives. Funding under the agency’s Independent Energy Efficiency Program will support the expansion of existing programs, such as weatherization, building electrification, renewable technologies, smart metering, and demand response efforts. The New York Power Authority, a key partner in these efforts, will have financed over $4 billion in energy efficiency projects at government facilities by the end of this year and aims to support $300 million annually in such projects.





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