From Lighting to Electrification: The Program Impacts of New Utility Commission Priorities

Utility commissions often guide state policy through energy efficiency plans. In recent years, many have approved plans that focus on reducing greenhouse gas emissions and promoting electrification. However, by focusing on these necessary goals, the plans can create challenges for some programs and customers by changing what is incentivized. Let’s look at two Northeast states to see how these decisions can play out.

Connecticut: Balancing Decarbonization, Equity, and Affordability

In the latest Conservation and Load Management (C&LM) plan, the Connecticut utilities listed three priorities: decarbonization, equitable access, and energy affordability.

In 2024, citing a transformed market, the CT utilities ended incentives for non-controlled lighting in the Midstream pathway of the Energy Opportunities (C&I) program, while also boosting lighting control trainings. During the 2025-2027 period, utilities will continue to provide incentives for non-controlled lighting as custom measures in their Large C&I and Small Business programs, recognizing that there are many applications where controlled LED lighting is either cost-prohibitive or not applicable.

Similarly, at the start of 2025, Connecticut ended incentives for natural gas combustion heating, hot water, and kitchen equipment. However, exceptions can be made if the electrification option is not technically feasible, is cost-prohibitive to the customer, or is not cost-effective to the portfolio.  

New York’s Strategic Framework and the End of “Non-Strategic” Measures

In May 2025, the New York Public Service Commission (PSC) authorized the state’s program administrators’ energy efficiency/beneficial electrification plans for 2026-2030.  The PSC’s order uses a Strategic Framework to prioritize investments. Under this framework, energy efficiency and beneficial electrification programs and measures are classified as either strategic, neutral, or non-strategic.

• Strategic: According to the framework, at least 85% of program budgets must support “strategic” measures, focusing on weatherization and electrification. These measures should permanently reduce energy usage or peak demand, improve building envelopes to promote efficiency and mitigate future electric peaks from electrification, or permanently reduce on-site fossil fuel combustion. All measures should not occur absent program intervention (i.e., there should be low free-ridership).
• Neutral: Up to 15% of budgets can be used to fund measures/programs that neither advance nor jeopardize strategic measures but produce overall reductions in annual energy consumption. These measures also cannot have any characteristics considered “non-strategic.”
• Non-Strategic: These measures must not receive ratepayer funding. These measures/programs either:
  • Jeopardize the advancement of strategic measures/programs.
  • Increase the use of fossil fuels.
  • Have an effective, useful life of six years or less.
  • Result in the use of more energy through increased operation of a measure.
  • Are naturally occurring energy efficiency resulting from codes and standards, or through routine market adoption without program intervention.
  • According to a NEEA blog post summarizing the order, the non-strategic category includes lighting measures, residential gas-fired appliances, commercial gas-fired cooking appliances, electric plug-in appliances, appliance recycling programs, home energy report programs, and online marketplace programs.     

When looking at the New York TRM, there are over 20 measures with EULs of six years or less that will be considered non-strategic and not eligible for program incentives. These are listed in the table below.

Implications for Programs and Evaluators

The guidance by the Connecticut and New York utility commissions is designed to help the states meet their greenhouse gas emission reduction goals, among other objectives. However, implementing these changes may create challenges for programs to meet their savings goals or for some homes or businesses to save energy. It may also conflict with other state objectives.

As an example, Michaels recently completed an evaluation of Connecticut’s small business (SBEA) program. Despite years of efforts to increase the program’s non-lighting projects, lighting projects still accounted for 80% of the program’s savings (MMBtu) from 2021-2024, although the share has decreased over this period. This is typical of most small business programs, which have historically relied on lighting to account for the vast majority of their savings.

Limiting lighting reduces opportunities for programs that use these measures as a “hook” to engage participants and lead to additional EE equipment and deeper savings. Similarly, many of the measures with lower EULs, such as tune-ups, refrigerator door gaskets and strips, and night covers, are the types of lower-cost measures often implemented by small businesses. While these measures account for relatively low levels of savings compared to equipment installed by a large C&I customer, not offering them could impact the equitable access of programs as well as customers’ energy bills.

Because of the limitations on gas combustion measures and reduced opportunities for savings from uncontrolled lighting, small business programs will need to offset those unrealized savings with other measures in order to meet their savings goals. These could include refrigeration measures, such as zero-energy refrigerated case doors and floating heat pressure controls, cold climate rooftop unit heat pumps, packaged window heat pumps, guest room energy management, and agriculture-specific measures. However, the potential for these potential replacements is limited and many small businesses may lack the capital to implement them. Programs would then need to reconsider how best to help these customers to ensure they have equitable access to savings as larger facilities, while also promoting engagement with the program.

As new plans come into effect, evaluators must also be aware of the challenges faced by programs. As the measure mix changes for some programs, they may not be able to meet their savings goals or may experience lower participant satisfaction as the “usual” measures are no longer offered or implementers struggle with new measures. Evaluators should take this into consideration when comparing the program to past benchmarks or when identifying areas for improvement.