Innovative Pilot to Reduce Energy Burden for Low-Income Households that Fully Electrify Their Homes
Ensures Households Pay No More Than Six Percent of Annual Income Toward Electricity Costs
Governor Kathy Hochul today announced that the New York State Public Service Commission (PSC) approved the implementation of the Energy Affordability Guarantee pilot program. The PSC’s decision provides a plan for the design and implementation of an energy affordability pilot program for low-income households who fully electrify their space and water heating through the EmPower+ program. This pilot program will provide approximately 1,000 EmPower+ program participants with tailored bill assistance to ensure they pay no more than six percent of their annual household income toward electricity costs.
“Affordability is a top priority, and we’re making much needed investments to help low-income New Yorkers affordably electrify their homes,” Governor Hochul said. “With the Energy Affordability Guarantee, we’re overcoming barriers to clean energy adoption for the most vulnerable families across the state.”
The energy affordability guarantee was first outlined by Governor Hochul in her 2023 State of the State. Funding for the multi-year pilot program is provided through a $50 million appropriation in the FY2025 State Budget.
To be eligible for the guarantee, the customer’s home must meet the income eligibility standard for low-income programs, which is set at annual household income equal to or lower than 60 percent of the State Median Income; and the customer must also be electrified through the EmPower+ program. The EmPower+ program, administered by the New York State Energy Research and Development Authority, provides no-cost and subsidized energy efficiency and clean energy upgrades for low-to-moderate income households.
The guarantee builds off of several other policies and programs in place to address energy affordability and clean energy solutions for low-income customers. First, the PSC has a longstanding energy affordability policy established in 2016, which set a goal for low-income customers to pay no more than 6 percent of their annual household income toward energy bills. The utility energy affordability program, which is administered by the major electric and gas utilities, provides low-income customers with bill payment assistance through monthly tiered discounts. Additionally, the Statewide low- to moderate-income portfolio represents nearly $170 million of energy efficiency initiatives directed at income-eligible households to improve access to clean energy solutions on an annual basis from 2020 through 2025.
PSC Chair Rory M. Christian said, “I applaud Governor Hochul’s dedication in providing New Yorkers with the financial resources to invest in energy efficient opportunities for their households. This effort will be a game-changer for low-income families, as we seek to balance the equally important goals of decarbonizing our housing stock, while advancing energy affordability for low-income customers.”
New York State Energy Research and Development Authority President and CEO Doreen M. Harris said,“The Energy Affordability Guarantee pilot approved today by the New York State Public Service Commission shows New York’s ongoing commitment to ensuring all residents can affordably access the benefits of the clean energy transition. The program is an exciting addition to EmPower+, illustrating how low- and moderate-income households will be able to benefit from lower and consistent energy bills while enjoying comfortable, healthier living spaces.”
New York Secretary of State Walter T. Mosley said, “The climate crisis and affordability are two of the greatest issues facing our residents, and Governor Hochul’s innovative Energy Affordability Guarantee pilot program will help to address both. This new program incentivizes low-income New Yorkers to fully electrify their homes, allowing them to both save money and also contribute to a greener New York State.”
Office of Temporary and Disability Assistance Commissioner Barbara C. Guinn said, “The Energy Affordability Guarantee will enable low-income families to afford their monthly utility bills while reducing their reliance on fossil fuels by fully electrifying their homes. New York continues to be a national leader in addressing climate change, and Governor Hochul has recognized the importance of ensuring historically underserved and disadvantaged communities are able to benefit from these clean energy investments.”
Public Utility Law Project (PULP) Executive Director and Counsel Laurie Wheelock said, “From its inception, PULP has long championed the EmPower+ Program. We’re excited to now see the Energy Affordability Guarantee work hand-in hand through this pilot to provide much-needed relief to a thousand participating low-income households struggling with high energy bills. PULP commends the Governor for spearheading these efforts that will help advance our climate goals while providing real, tangible benefits to vulnerable households across the State. We look forward to continuing our work with the state to strengthen and expand these essential programs to more New Yorkers.”
AARP New York State Director Beth Finkel said, “AARP applauds the leadership of Governor Hochul and the Public Service Commission to continue to make energy more affordable for those who struggle to pay their ever-increasing utility bills. Programs like EmPower+ will serve as a solid model for future energy policy that can not only assist low-income households but also those middle-class families trying to make ends meet.”
In May, Governor Hochul announced New York State became the first state in the nation to offer the first phase of Inflation Reduction Act (IRA) Home Electrification and Appliance Rebates (HEAR). The initial $39.6 million formula grant expanded the reach of New York’s EmPower+ program by allowing more low-income families to improve their homes with energy efficiency and electrification upgrades to reduce energy costs and transition away from burning fossil fuels in their homes. On June 14, NYSERDA submitted the application for the full scope of HEAR and HER incentives to the Department of Energy, which will enable the expansion of IRA rebate offers to moderate-income residents and to owners of larger low- and moderate-income multifamily buildings, as well as retail point-of-sale (POS) funding for appliances.
The PSC expects the pilot program will fill in important information gaps regarding the electrification of low-income households such as the incremental electricity consumption and cost associated with operating heat pumps across different customer and housing profiles, while mitigating energy burden increases. These insights will inform broader strategies to promote the decarbonization of the housing sector while prioritizing energy affordability and consumer protections for the most vulnerable New Yorkers.
New York State’s Nation-Leading Climate Plan
New York State’s climate agenda calls for an orderly and just transition that creates family-sustaining jobs, continues to foster a green economy across all sectors and ensures that at least 35 percent, with a goal of 40 percent, of the benefits of clean energy investments are directed to disadvantaged communities. Guided by some of the nation’s most aggressive climate and clean energy initiatives, New York is advancing a suite of efforts – including the New York Cap-and-Invest program (NYCI) and other complementary policies – to reduce greenhouse gas emissions by 40 percent by 2030 and 85 percent by 2050 from 1990 levels. New York is also on a path toward a zero-emission electricity sector by 2040, including 70 percent renewable energy generation by 2030 and economy-wide carbon neutrality by mid-century. A cornerstone of this transition is New York’s unprecedented clean energy investments, including more than $28 billion in 61 large-scale renewable and transmission projects across the State, $6.8 billion to reduce building emissions, $3.3 billion to scale up solar, nearly $3 billion for clean transportation initiatives and over $2 billion in NY Green Bank commitments. These and other investments are supporting more than 170,000 jobs in New York’s clean energy sector as of 2022 and over 3,000-percent growth in the distributed solar sector since 2011. To reduce greenhouse gas emissions and improve air quality, New York also adopted zero-emission vehicle regulations, including requiring all new passenger cars and light-duty trucks sold in the State be zero emission by 2035. Partnerships are continuing to advance New York’s climate action with more than 400 registered and more than 130 certified Climate Smart Communities, over 500 Clean Energy Communities, and the State’s largest community air monitoring initiative in 10 disadvantaged communities across the State to help target air pollution and combat climate change.