On August 13, 2026, the New York Public Service Commission (PSC or Commission) opened Case 26-M-0525 implementing the Excelsior Power Program. Governor Kathy Hochul first proposed the program in her 2026 State of the State address, and the Legislature backed it with $33 million in the 2026–2027 Enacted State Budget. The program envisions a centralized, statewide demand-response platform that will consolidate existing residential Direct Load Control (DLC) programs for both summer and winter load relief. The Order directs the major gas and electric utilities to jointly develop and file a phased Implementation Plan and invites comments from all interested stakeholders.
This post summarizes the key features of the Order, the legislative framework underpinning the program, and the practical next steps for energy market participants, consumers, and other stakeholders.
I. Background: The Case for a Statewide Demand-Response Platform
Peak electricity and gas usage in New York typically spans only a few hours on a handful of days each year. Through Demand Response (DR) programs, participating customers voluntarily reduce their usage during those peaks, helping to scale down or eliminate the need for costly infrastructure investments. As the Commission explains in the Order, DR programs offer “a cost-effective way to manage the need for such major infrastructure investments and undertaking significant capital expenditures on the energy system.”
Today, residential customers participate in DR primarily through Wi-Fi-enabled smart thermostats under Bring Your Own Thermostat (BYOT) programs and, more recently, through home battery storage under Bring Your Own Battery (BYOB) programs. Each utility currently runs these DLC programs individually, for each commodity (electric and gas), creating enrollment friction and operational inefficiencies. Roughly 120,000 residential customers across the state have enrolled in these voluntary programs to date.
The Excelsior Power Program tackles these inefficiencies head-on by creating a single statewide enrollment platform—the Excelsior Power Platform—that replaces the current utility-by-utility, commodity-by-commodity approach with a one-stop shop for residential customers.
II. Legislative Framework: PSL §67-b and Budget Appropriation
The program draws its legal authority from the 2026–2027 Enacted Budget, which appropriates $33 million for the Excelsior Power Program and adds a new Section 67-b to the Public Service Law. Key statutory requirements include:
- The program must be voluntary and opt-in, reducing peak energy demand through remote operation of customer-enrolled smart thermostats.
- Customers must be allowed to override utility control of their smart thermostat during demand response events without penalty, except for discounting or derating bill credits.
- Customers may de-enroll from the program without penalty, with the caveat that unearned future bill credits will cease.
- De-enrollment must be no less convenient than the method of enrollment.
- The Commission’s implementation must include minimum customer education and outreach efforts.
The Budget also adds Section 1020-nn to the Public Authorities Law, requiring the Long Island Power Authority (LIPA) to establish an Excelsior Power program consistent with PSL §67-b and ensuring statewide coverage.
III. Key Features of the Order
A. Scope of the Platform
While Governor Hochul’s State of the State proposal centered on smart thermostats for electric-system flexibility, the Commission has adopted a broader vision. The Order calls for the Excelsior Power Platform to serve as a “one-stop shop for enrolling all applicable devices within residential DLC Programs for both electric and gas systems.” At a minimum, the Platform will aggregate the existing electric DLC program components—BYOT and BYOB—and stand ready to incorporate gas demand response programs that use the same equipment.
B. Expected Benefits
The Commission highlights three principal advantages of a statewide platform:
- Improved Customer Experience. A single platform lets customers enroll once instead of navigating multiple utility-specific programs. This matters especially for customers who receive electric and gas service from different providers (e.g., a Brooklyn resident whose electricity comes from Con Edison and whose gas comes from KEDNY). Under the new Platform, a customer submits one application, and the system automatically routes it to the correct utility service territory.
- Cost Savings Through Collective Procurement. Shifting from individual contracts to a collective procurement process should yield better pricing for platform services, lower implementation and ongoing costs, and potentially support higher participation incentives.
- Easier OEM Onboarding. A statewide platform makes it simpler to bring new device manufacturers on board (e.g., new thermostat or battery brands) and to add new DLC program components for other controllable devices, such as smart water heaters or window air conditioners.
C. Eligibility and Enhanced Incentives
Any residential customer with a smart thermostat or home battery storage system may voluntarily opt in. Following the Governor’s recommendation, the Commission has set an enhanced incentive of $25 per month for the first year of participation, drawn from the $30 million incentive allocation within the Budget. Only new participants qualify for the enhanced incentive—customers already enrolled in a utility BYOT program before the 2026–2027 Enacted Budget took effect are ineligible.
After the first year, participants who received the enhanced incentive move to the standard value-based incentive levels, which the Commission grounds in avoided costs and guides by benefit-cost analyses. The Commission estimates that the $30 million budget, combined with the new-participant-only eligibility rule, will fund enough enhanced incentives to roughly double current BYOT enrollment.
D. Customer Protections
PSL §67-b gives participating customers a set of core protections:
- Customers can override utility control of their smart thermostat during any demand response event.
- No penalties apply for overriding control, though the customer’s bill credits may be discounted or derated.
- Customers may de-enroll at any time without penalty, though unearned future bill credits will cease.
- The program must make de-enrollment at least as easy as enrollment.
IV. Implementation Plan: Two-Phase Filing Timeline
The Order sets an aggressive two-phase filing schedule:
- Phase 1 (Due Within 30 Days). Phase 1 covers only those providers with existing BYOT programs (Con Edison, KEDNY, KEDLI, LIPA/PSEG-LI, National Grid, NYSEG, O&R, and RG&E). They must file: (1) an immediate plan to rebrand each individual BYOT program under the Excelsior Power name; (2) eligibility criteria for the enhanced incentive level and a timeline to launch once approved; and (3) a mechanism to ensure customers in overlapping service territories receive only one enhanced incentive.
- Phase 2 (Due Within 120 Days). Phase 2 covers all gas and electric providers and must address, at a minimum: (1) a process and timeline for selecting a statewide Platform provider; (2) a statewide outreach and education plan, proposing how to deploy $3 million in Budget funding; (3) a cost-responsibility methodology; (4) cost allocation and recovery mechanisms; (5) a process for implementing future program changes on the Platform; (6) an event administration process; (7) plans to bring the BYOB program onto the Platform; (8) actions needed to comply with PSL §67-b; and (9) any other components deemed critical for statewide operations.
Both phases will go through a public comment period before the Commission acts on them. The Commission has designed this timeline to bring the Excelsior Power Platform online in time for the summer 2027 electric DR capability period.
V. Stakeholder Comment Opportunity
Beyond the provider filings, the Commission invites all stakeholders to weigh in within 120 days on how far to harmonize the underlying DLC programs that will run on the Platform. The core question: should DLC program rules, requirements, performance levels, and incentive payment levels vary by service territory, or should they be uniform statewide? The answer will shape the Platform’s operational details and carry significant implications for program design, consumer experience, and market competition.
VI. Observations and Takeaways
The Excelsior Power Program marks one of the most ambitious demand-response consolidation efforts in New York’s recent regulatory history. Several points stand out:
- Broader Than Expected. The Commission has expanded the program well beyond the Governor’s initial smart-thermostat focus to encompass battery storage (BYOB) and gas DR programs, with the door open to additional device types such as smart water heaters and window air conditioners. Device manufacturers, aggregators, and other market participants should watch this Platform’s potential to grow.
- Procurement Implications. Moving to a single statewide platform provider will reshape how DLC program implementation services are procured. Incumbent vendors such as EnergyHub and Uplight, which currently hold individual contracts, will be watching the competitive solicitation closely. The collective procurement approach could yield larger, more lucrative contracts—but also more intense competition.
- Tight Timelines. A 30-day window for the Phase 1 filing is aggressive, especially given the need to coordinate among multiple providers and consult with LIPA. Stakeholders who want to engage early should be tracking the proceeding now.
- Harmonization Is the Big Question. Whether DLC program rules end up uniform statewide or remain territory-specific will be one of the most consequential outcomes of this proceeding. Anyone with strong views on program design—including incentive levels, event-calling criteria, and performance standards—should plan to file comments within the 120-day window.
- LIPA Integration. Although LIPA falls outside the Commission’s direct jurisdiction, both the Order and the Budget make clear that the program should include LIPA “to the maximum extent feasible.” The Commission has directed the other providers to collaborate with LIPA and PSEG-LI in developing the Implementation Plan, and PSEG-LI already runs BYOT and BYOB components within its DR portfolio.
The full Order Initiating Proceeding, Directing Proposal, and Soliciting Comments is available on the Department of Public Service’s website under Case 26-M-0525. Hodgson Russ will continue to monitor this proceeding and stands ready to assist clients with Implementation Plan filings, stakeholder comments, and compliance with PSL §67-b.
For questions about the Excelsior Power Program or New York energy regulatory matters, contact Daniel A. Spitzer, Thomas S. Berkman, William S. Helmer or any member of the Hodgson Russ Environment & Energy Practice.
