Policy brief · New York thermal energy networks · October 2026

New York Approved 2 of 11 Thermal Network Pilots.Here Is What the Study Missed.

NY Public Service Commission (PSC), Case 22-M-0429 · Order issued and effective October 15, 2026

Goal: This paper explains what the New York Public Service Commission (PSC) decided on the first 11 utility thermal energy network (UTEN) pilots, what its cost study left out, and what New York should change before the next round.

11
pilots reviewed
2
approved to build
$1.14B
proposed budgets, all 11
$93M
state funds to the 2 winners
Read the executive summaryDownload the executive summary (PDF)Full tables
Main source: NY PSC, Case 22-M-0429, "Order Addressing Multiple Utility Thermal Energy Network Pilot Projects", issued and effective October 15, 2026, 208 pages plus Appendices A-C. PDF shared on LinkedIn, accessed 2026-10-21. Tiles: pp. 3-4, 201-202, 153; Appendix A.

2 of 11 move forward

Illustration: a bison in front of the Buffalo skyline with City Hall tower and Lake Erie; a large sewer main below the street supplies heat to an energy center and nearby buildings, all piping below grade.City HallLake Erie96-inch sewer: heat source, below the street
Approved Buffalo · NFGSewer wastewater heat, central heat pumps (p. 120)
Illustration: Haverstraw's brick kiln stack and brick village beside the Hudson River with High Tor behind; borehole loops and a wastewater main below grade serve the buildings.brick kiln stackHigh TorHudson River2 borefields + wastewater main, below grade
Approved Haverstraw West Loop · O&R2 borefields plus a wastewater force main (p. 144)

9 not advanced (pp. 95-144, 201-202)

Poughkeepsie: Walkway Over the Hudson bridge, all windows dark
PoughkeepsieCentral HudsonNot advanced
Chelsea: brick public-housing towers, all windows dark
ChelseaCon EdisonNot advanced
Mount Vernon: small downtown with church steeples, all windows dark
Mount VernonCon EdisonNot advanced
Rockefeller Center: art deco skyscraper, all windows dark
Rockefeller CenterCon EdisonNot advanced at this time
Brooklyn: Brooklyn Bridge tower and apartments, all windows dark
BrooklynKEDNYNot advanced
Syracuse: inner harbor with aquarium, all windows dark
SyracuseNMPCNot advanced at this time
Troy: historic brick rowhouses, all windows dark
TroyNMPCNot advanced
Ithaca: clock tower above a gorge waterfall, all windows dark
IthacaNYSEGNot advanced
Haverstraw East: riverfront factory on the Hudson, all windows dark
Haverstraw EastO&RNot advanced

Part 1

Executive summary

Key takeaways

2 of 11 move forward

Buffalo (NFG)
Haverstraw West Loop (O&R)

The PSC made the right call

Stopped 9 high-cost pilots
Raised the enrollment bar to 50%

The study left value out

No credit for avoided gas pipe
No credit for avoided grid upgrades
No carbon damage value

Behind the cost: site and route

Lost anchors
Unsigned land
Buildings slated for demolition

The incentive points the wrong way

Allowed returns of 9.2% to 9.75% on equity
The PSC flagged it in 2016

Next window: 180 days

PSC technical conference
Waste heat and the rules for TENs

1. What the PSC decided

The 2 approved pilots: deferral caps against state funds

  • Buffalo may defer up to $61.4M, less state funds (p. 154)
  • Haverstraw West Loop may defer up to $50.1M, less state funds (p. 157)
  • These are deferral caps, not final costs
  • $93M in state funds goes to the 2 pilots, not split between them (pp. 3-4, 153-154)
$0M $20M $40M $60M $80M $100M $120M Deferral caps,2 approved pilots Buffalo (NFG)$61.4M (p. 154) West Loop (O&R)$50.1M (p. 157) $111.5M State funds,Sustainable Futures $93M (pp. 3-4, 153-154) $18.5Mremaining after state funds,Gaiergy calculation
Buffalo (NFG) deferral cap less state funds, p. 154 $61.4M West Loop (O&R) deferral cap less state funds, p. 157 $50.1M Both caps together Gaiergy calculation $111.5M State funds, Sustainable Futures pp. 3-4, 153-154 $93M Remaining after state funds Gaiergy calculation $18.5M
  • $111.5M is the sum of the 2 caps; $18.5M is $111.5M less $93M
  • Both are Gaiergy calculations, not figures the order states
  • What customers finally pay depends on actual costs (pp. 155-156, 159-160)

2. Credit where it is due

The PSC did its job as a gatekeeper. It:

3. What the cost study should have counted

Gaiergy analysis and opinion

The PSC compared each network with individual air-source and ground-source heat pumps over 25 years (pp. 45, 52). Several things were left out of that comparison:

Illustration: an old, cracked, leaking cast-iron gas main below the street beside a clean new pipe, with a costly street dig above; stamped $0 credit.cast-iron gas main, 1890$0 credit

Avoided gas pipe replacement

Not counted
  • None tried to "quantify this value" (p. 83)
  • PSC: "most likely not zero" (p. 83)
  • Mount Vernon: 1890 main, no value (p. 107)
Illustration: a snowy street on a winter night with an overloaded pole transformer and substation glowing hot; stamped $0 credit.transformer and line upgrades$0 credit

Avoided electric grid upgrades

Not counted
  • Winter peak cut 17% to 66% vs ASHP (p. 79)
  • No dollar value for avoided upgrades (p. 83)
Illustration: exhaust from gas furnace flues on a row of homes merges into one heavy dark carbon cloud hanging over them; stamped $0 damage value.CO2$3,383 to $15,804 a ton$0 damage value

The value of carbon

Not counted
  • $3,383 to $15,804 per ton avoided (p. 65)
  • No "social cost" or "value of carbon"

Utility return, depreciation and financing

Left out of the LCCA
  • Left out of the LCCA: return, depreciation, financing (p. 46 n.57)
  • PSC: costs therefore "somewhat understated" (p. 74)

Other owners

Not compared
  • No pilot compared with a municipal, cooperative or private owner
  • NYSERDA and the PSC point past investor-owned utilities (pp. 42, 194)

Hybrid designs and storage

Not tested
  • No gas peak boiler, and no pilot can actively shift its peak (pp. 77, 82)
  • Cited study: gas peaking cuts borefield size and costs "by 50 percent" (p. 78)

Property tax

Not addressed
  • Largest single operating cost: 27% on average, 72% at Poughkeepsie (p. 73)
  • The order does not discuss exemptions or payments in lieu of taxes

Open books

Workpapers not filed unredacted
  • Central Hudson, KEDNY and NMPC (Syracuse) did not file unredacted cost workpapers (p. 48)

4. Behind the cost: site, route and who signs up

Gaiergy analysis and opinion

The PSC stopped these pilots on cost. In our reading, much of that cost traces back to where the pilots were put and who was ready to join:

Poughkeepsie

Anchor customer gone
  • Anchor customer dropped out (pp. 13-14, 96)
  • Asbestos, lead, PCB work "may be required" (pp. 13-14, 96)
  • Residents would relocate temporarily (pp. 13-14, 96)

Chelsea

Buildings slated for demolition
  • 3 buildings slated for demolition (pp. 19, 100, 103-104)
  • $12.0M left "stranded" (pp. 19, 100, 103-104)
  • No deal with the waste-heat owner (pp. 19, 100, 103-104)

Mount Vernon

Land not signed
  • Land for the 4 borefields not secured (p. 109)
  • PSC: "not in and of itself determinative" (p. 109)

Brooklyn

No room for bores
  • "insufficient space" for the required boreholes (p. 124)

Syracuse

Buildings not built
  • 13 of 14 buildings not built yet (pp. 127, 129)

Troy

City stepped back
  • City stepped back from owning the borefield (p. 133)
  • Costs rose (p. 133)

Ithaca

Aquifer risk
  • Aquifer: uncertain water "quantity or quality" (p. 137)

Haverstraw East

One developer
  • Hinges on one developer's schedule (pp. 140-141)

Enrollment was the weak link

Enrollment: assumed vs required

0% 25% 50% 75% 100% Share of forecast load Assumed in the Mount Vernonand West Loop analysesNYSERDA, p. 41 100% O&R proposed minimumHaverstraw West Loop, pp. 183-184 15% PSC required minimumHaverstraw West Loop, pp. 183-184 50%
Assumed in the Mount Vernon and West Loop analyses NYSERDA, p. 41 100% O&R proposed minimum Haverstraw West Loop, pp. 183-184 15% PSC required minimum Haverstraw West Loop, pp. 183-184 50%
  • Bars: share of forecast load signed before construction (pp. 183-184)
  • First bar: enrollment assumed in two cost analyses (NYSERDA, p. 41)

Gaiergy practice

  • We knock on doors and list who wants to join before we draw a route
  • The route follows the people who sign up, not the other way around

5. Estimates that moved, and who made them

Gaiergy analysis and opinion

Gaiergy's view of why the estimates moved:

Opinion of Jason Masters, in his words

There's a uniqueness bias that creeps into these initial cost estimates. These TENs were costed without looking at how to stage their construction against the next 5 to 10 year capital improvement plan that the cities were going forward with anyway. To embed cost efficiency, you need to couple TENs with capital improvement plans.
Jason Masters, President, Gaiergy Corp

6. The incentive problem

Gaiergy analysis and opinion

A regulated utility earns its profit as a return on the capital it invests. Today's allowed returns on equity in New York:

1 Capital spentpipes, plant, equipment 2 Added tothe rate base 3 Return on equityabout 9.2% to 9.75% 4 Recoveredfrom customers' bills thenmore capitalearns more return Illustrative cycle.
  1. 1Capital spent
    pipes, plant, equipment
  2. 2Added to the rate base
  3. 3Return on equity
    about 9.2% to 9.75%
  4. 4Recovered from customers' bills
  5. ↻Then more capital
    earns more return

Illustrative cycle.

0% 2% 4% 6% 8% 10% Allowed return on equity O&R (electric and gas)Cases 24-E-0060 / 24-G-0061, Mar 20, 2025 9.75% NFG (gas)Case 23-G-0627, Dec 19, 2024 9.70% Central HudsonCases 24-E-0461 / 24-G-0462, Aug 14, 2025 9.5% National Grid upstate (NMPC)Cases 24-E-0322 / 24-G-0323, Aug 14, 2025 9.50% Con EdisonCases 25-E-0072 / 25-G-0073, Jan 22, 2026 9.40% National Grid NY (KEDNY) and KEDLICases 23-G-0225 / 23-G-0226, Aug 15, 2024 9.35% NYSEG and RG&ETemporary rates, May 14, 2026; rate cases pending 9.2%
O&R (electric and gas) Cases 24-E-0060 / 24-G-0061, Mar 20, 2025 9.75% NFG (gas) Case 23-G-0627, Dec 19, 2024 9.70% Central Hudson Cases 24-E-0461 / 24-G-0462, Aug 14, 2025 9.5% National Grid upstate (NMPC) Cases 24-E-0322 / 24-G-0323, Aug 14, 2025 9.50% Con Edison Cases 25-E-0072 / 25-G-0073, Jan 22, 2026 9.40% National Grid NY (KEDNY) and KEDLI Cases 23-G-0225 / 23-G-0226, Aug 15, 2024 9.35% NYSEG and RG&E Temporary rates, May 14, 2026; rate cases pending 9.2%

Allowed return on equity as approved by the PSC, sources accessed 2026-10-21: NFG, PSC rate case memo, Case 23-G-0627; O&R, rate case summary; Con Edison, rate case summary; Central Hudson, rate case summary; NMPC, rate case summary; KEDNY and KEDLI, PSC session transcript, August 15, 2024, p. 10, and session slides; NYSEG and RG&E, temporary rate summary.

In 2016, PSC Staff raised a "bias toward return-earning capital expenditures," and the Commission found that utilities have "a more general incentive to favor their own spending over third-party investment" (Case 14-M-0101, REV Track Two Order, May 19, 2016, pp. 13, 32: documents.dps.ny.gov).

Economists have described this since 1962 (Averch and Johnson, "Behavior of the Firm Under Regulatory Constraint," American Economic Review 52(5)).

Opinion of Jason Masters, in his words

A utility, as a regulated monopoly, has the experience of running utility infrastructure. But the utility will make more money by investing in its current system. It can invest in failing infrastructure without having to become more innovative, and it reduces the risk of the unknown by clinging to the past.
Jason Masters, President, Gaiergy Corp

7. What New York should change before the next round

Gaiergy recommendations

1

Prove the customers first.

  • Get signed interest before Stage 2 design
  • Route the network to the people who sign
2

Count the full value.

  • Price the avoided gas pipe and grid upgrades
  • Count the value of carbon in every analysis
3

Allow hybrid designs and storage.

  • A fossil boiler for the coldest days (pp. 77-78)
  • Thermal storage to shift the peak (pp. 77-78)
4

Open the door to other owners.

  • Let municipalities and co-ops own networks (pp. 42, 194)
  • Let private developers propose them too (pp. 42, 194)
5

Test estimates with builders.

  • Ask for estimates that builders have checked
6

Fix the property tax drag.

  • Consider exemptions for network assets
  • Or payments in lieu of taxes
7

Use the 180-day technical conference.

  • Next chance to shape the rules for TENs and waste heat (Clause 21, p. 207)

Closing. Opinion of Jason Masters, in his words

The only way we transition to a more efficient infrastructure is to be cognizant that long-term infrastructure requires a diligence of innovation that the majority of the applicants weren't capable of demonstrating.
Jason Masters, President, Gaiergy Corp

Part 2

The order in detail

What the order says, pilot by pilot.

How a thermal network works

street leveleverything below is underground warmer water to the buildings (winter) → ← cooler water back to the heat sources One shared loop below the street. In summer, heat flows the other way: buildings reject heat into the loop. Waste heatdata center, cooling plant Sewer or wastewaterheat exchanger on the sewer Ground boreholeshundreds of feet deep HP HP HP Buildings with heat pumps (HP) Illustrative only. Not to scale. No pilot data.

Pilots differ: some use a one-pipe loop, others two or four pipes (pp. 12-37)

The order at a glance

Only 2 of 11 advance

Buffalo sewer-heat network
Haverstraw West Loop

Cost decided it

$3,383 to $15,804 per ton
Heat pumps: $200 to $4,284

Running costs never reach parity

OpEx above today's systems in all 11
Ithaca: 33.7x ASHP

Budgets nearly tripled

$413M in 2023
$1,139M at Stage 2

Gas customers pay for 8 stopped pilots

Stage 1-2 costs deferred
$93M state funds help the winners

Next window: technical conference

180 days after the order
Waste heat and new TEN rules

From 11 pilots to 2

1
Poughkeepsie
Central Hudson · DAC
Declined
2
Chelsea
Con Edison · DAC
Declined
3
Mount Vernon
Con Edison · DAC
Declined
4
Rockefeller Center
Con Edison
Declined at this time
5
Buffalo
NFG · DAC
Approved to Stage 3
6
Brooklyn
KEDNY · DAC
Declined
7
Syracuse
NMPC
Declined at this time
8
Troy
NMPC
Declined
9
Ithaca
NYSEG
Declined
10
Haverstraw East Loop
O&R · DAC
Declined
11
Haverstraw West Loop
O&R · DAC
Approved to Stage 3
2
pilots approved to Stage 3
"New York State's first UTEN pilot projects" (p. 201)
  • PSC chose 2 different designs for "the highest possible learning value" (p. 201)
  • It sought to avoid "potentially redundant approaches at the expense of ratepayers" (p. 201)
  • It also cites "elevated affordability concerns" (p. 202)
  • DAC = disadvantaged community

Where the 11 pilots are

All 11 pilot sites: 5 upstate on the state map, 6 in the New York City area inset.

11 pilots:✓ 2 approved (green, with halo) 9 declined (red) inset area
6 pilotssee inset Buffalo Syracuse Ithaca Troy Poughkeepsie 5 7 9 8 1 NEW YORKPENNSYLVANIA
New York City area inset: 6 pilots
Haverstraw West 11 Haverstraw East 10 Mount Vernon 3 Rockefeller Center 4 Chelsea 2 Brooklyn 6 NEW JERSEY
  • 1 Poughkeepsie, Central Hudson
  • 2 Chelsea, Manhattan, Con Edison
  • 3 Mount Vernon, Con Edison
  • 4 Rockefeller Center, Manhattan, Con Edison
  • 5 Buffalo, NFG: approved
  • 6 Brooklyn, KEDNY
  • 7 Syracuse, NMPC
  • 8 Troy, NMPC
  • 9 Ithaca, NYSEG
  • 10 Haverstraw East Loop, O&R
  • 11 Haverstraw West Loop, O&R: approved
  • Place names: order pp. 12-37
  • Marker positions are approximate, placed by Gaiergy; the order gives no coordinates
  • Outlines: US Census Bureau cartographic boundary files, 2023 (see Sources)

Decision on each pilot

#PilotUtilityHeat sourceDecisionFinal budgetCarbon cost, $/MTCO2eMain reason
1Poughkeepsie
DAC		Central HudsonClosed-loop geothermal: 3 borefields, 138 boresDeclined
p. 99		$130.99M$10,602Highest CapEx per square foot, $595/SF; OpEx 18x ASHP; anchor customer left
2Chelsea
DAC		Con EdisonData-center waste heat (85 Tenth Ave)Declined
p. 104		$95.53M$15,804Highest carbon cost; higher winter peak than ASHPs; NYCHA plans to rebuild
3Mount Vernon
DAC		Con Edison4 borefields plus air-source heat pumpsDeclined
p. 109		$191.73M$11,757Largest budget; CapEx 8.3x ASHP; borefield land not secured
4Rockefeller CenterCon EdisonChilled-water plant waste heat, about 90°F loopDeclined at this time
p. 114		$128.22M$3,383Ratepayers would fund about 90% of conversions for owners outside a DAC (p. 112)
5Buffalo
DAC		NFGSewer wastewater heat plus small borefield; central heat pumps✓ Approved
p. 120		$61.40M$4,342Second-lowest carbon cost; lowest OpEx; lowest annual subsidy
6Brooklyn
DAC		KEDNYBorefield 52%, grocery waste heat 37%, sewage 11%Declined
p. 125		$125.49M$7,480Building retrofit cost over network cost by 50%+; relies on grocery heat
7SyracuseNMPCTreated wastewater effluent, about 24 h storageDeclined at this time
p. 130		$143.65M$11,048Highest total CapEx, $168.9M; depends on future construction
8TroyNMPCOne borefield on city land plus air-source heat pumpsDeclined
p. 134		$90.93M$6,283CapEx 10.0x ASHP; City of Troy withdrew as resource owner
9IthacaNYSEGOpen-loop aquiferDeclined
p. 137		$52.48M$5,599Highest OpEx, 33.7x ASHP; aquifer and permits uncertain
10Haverstraw East Loop
DAC		O&R5 borefields 61%, Hudson River 35%, wastewater 4%Declined
p. 141		$68.00M$8,254Depends on anchor developer schedule; several river-access permits
11Haverstraw West Loop
DAC		O&R2 borefields plus wastewater force main✓ Approved
p. 144		$50.10M$6,480Second-lowest subsidy; lowest 5-year cost; public customers

Why most were stopped: the cost findings

Cost to avoid one ton of carbon

  • Every UTEN costs more per ton than individual heat pumps (pp. 64-65)
  • UTEN $3,383 to $15,804 per ton; ASHP $200 to $4,284; GSHP $711 to $3,005 (pp. 64-65)
  • Buffalo is second lowest; Chelsea is highest (pp. 64-65)
UTENIndividual ASHPIndividual GSHPApproved pilot
$0 $4,000 $8,000 $12,000 $16,000 Cost to avoid one metric ton of CO2e, $ per MTCO2e (p. 65) Rockefeller Ctr Con Edison $3,383 $1,244 GSHP not compared Buffalo NFG · approved $4,342 $1,263 GSHP not compared Ithaca NYSEG $5,599 $1,518 $2,484 Troy NMPC $6,283 $200 GSHP not compared Haverstraw West O&R · approved $6,480 $1,156 $1,512 Brooklyn KEDNY $7,480 $4,284 GSHP not compared Haverstraw East O&R $8,254 $380 $816 Poughkeepsie Central Hudson $10,602 $314 $711 Syracuse NMPC $11,048 ASHP not compared GSHP not compared Mount Vernon Con Edison $11,757 $807 $3,005 Chelsea Con Edison $15,804 $2,285 GSHP not compared
Rockefeller Ctr Con Edison $3,383 $1,244 GSHP not compared Buffalo NFG · approved $4,342 $1,263 GSHP not compared Ithaca NYSEG $5,599 $1,518 $2,484 Troy NMPC $6,283 $200 GSHP not compared Haverstraw West O&R · approved $6,480 $1,156 $1,512 Brooklyn KEDNY $7,480 $4,284 GSHP not compared Haverstraw East O&R $8,254 $380 $816 Poughkeepsie Central Hudson $10,602 $314 $711 Syracuse NMPC $11,048 ASHP not compared GSHP not compared Mount Vernon Con Edison $11,757 $807 $3,005 Chelsea Con Edison $15,804 $2,285 GSHP not compared $ per MTCO2e (p. 65). UTEN, ASHP, GSHP.

For Syracuse, the existing system is already ASHP, so no heat pump comparison applies (p. 65).

Capital cost: per square foot and against heat pumps

  • CapEx runs from $27 to $595 per gross square foot (GSF) (pp. 66-68)
  • That is 1.4 to 10.0 times ASHP and 1.7 to 4.3 times GSHP (pp. 66-68)
  • About one third each: customer buildings, central equipment, other items (p. 69)
$ per GSFMultiple of ASHP CapExApproved pilot
$0 $150 $300 $450 $600 0x 2x 4x 6x 8x 10x CapEx, $ per gross square foot (GSF) (pp. 66-68) CapEx as a multiple of ASHP Rockefeller Ctr $27 1.4x Buffalo $170 2.9x Ithaca $270 2.8x Troy $295 10.0x Haverstraw West $221 3.8x Brooklyn $356 2.0x Haverstraw East $105 5.6x Poughkeepsie $595 6.5x Syracuse $94 3.2x Mount Vernon $323 8.3x Chelsea $224 2.4x
Rockefeller Ctr Con Edison $27/GSF 1.4x ASHP Buffalo NFG · approved $170/GSF 2.9x ASHP Ithaca NYSEG $270/GSF 2.8x ASHP Troy NMPC $295/GSF 10.0x ASHP Haverstraw West O&R · approved $221/GSF 3.8x ASHP Brooklyn KEDNY $356/GSF 2.0x ASHP Haverstraw East O&R $105/GSF 5.6x ASHP Poughkeepsie Central Hudson $595/GSF 6.5x ASHP Syracuse NMPC $94/GSF 3.2x ASHP Mount Vernon Con Edison $323/GSF 8.3x ASHP Chelsea Con Edison $224/GSF 2.4x ASHP Top bar: $ per GSF. Bottom bar: multiple of ASHP (pp. 66-68).

Annual running cost against heat pumps

  • OpEx is higher than the existing system in all 11 pilots (pp. 73-75)
  • PSC: pilots may need "further, and potentially indefinite, ratepayer subsidization" (pp. 73-75)
  • Lowest: Buffalo, $80 per MMBtu, 1.9 times ASHP (pp. 70-71)
  • Highest: Ithaca, $1,120 per MMBtu, 33.7 times ASHP (pp. 70-71)
OpEx multiple of ASHPOff the scaleApproved pilot
0x 5x 10x 15x 20x 1x = same as ASHP Annual OpEx as a multiple of ASHP (pp. 70-71) $M per year $ per MMBtu Rockefeller Ctr 4.0x $7.23M $123 Buffalo 1.9x $0.94M $80 Ithaca 33.7x $6.50M $1,120 Troy 3.8x $3.30M $238 Haverstraw West 3.9x $1.69M $188 Brooklyn 2.1x $4.23M $251 Haverstraw East 3.0x $3.10M $153 Poughkeepsie 18.0x $5.11M $540 Syracuse 1.3x $7.24M $159 Mount Vernon 13.9x $9.66M $412 Chelsea 17.6x $6.18M $611
Rockefeller Ctr Con Edison · $7.23M/yr · $123/MMBtu 4.0x Buffalo NFG · $0.94M/yr · $80/MMBtu 1.9x Ithaca NYSEG · $6.50M/yr · $1,120/MMBtu 33.7x (off scale) Troy NMPC · $3.30M/yr · $238/MMBtu 3.8x Haverstraw West O&R · $1.69M/yr · $188/MMBtu 3.9x Brooklyn KEDNY · $4.23M/yr · $251/MMBtu 2.1x Haverstraw East O&R · $3.10M/yr · $153/MMBtu 3.0x Poughkeepsie Central Hudson · $5.11M/yr · $540/MMBtu 18.0x Syracuse NMPC · $7.24M/yr · $159/MMBtu 1.3x Mount Vernon Con Edison · $9.66M/yr · $412/MMBtu 13.9x Chelsea Con Edison · $6.18M/yr · $611/MMBtu 17.6x Multiple of ASHP OpEx (pp. 70-71). Scale ends at 20x.

What the running cost is made of

AnnualOpEx mix
  • 27% Property tax
  • 25% Energy and maintenance
  • 22% Staffing
  • 14% Pilot-imposed costs
  • 12% Contingency and other

Share of OpEx across all pilots (pp. 72-73).

Single pilots show the extremes (p. 73):

  • Property tax is 72% of Poughkeepsie OpEx.
  • Staffing is 73% of Ithaca OpEx.
  • Pilot-imposed costs are 54% of East Loop and 65% of West Loop OpEx.

Winter peak electric demand against heat pumps

  • 10 of 11 pilots cut the winter peak vs ASHPs, by 17% to 66% (pp. 79-80)
  • Chelsea alone has a higher peak than ASHPs, by 23% (pp. 79-80)
  • Ambient loop source temperatures "may be 20°F to 40°F warmer" than design-day (p. 81)
Peak cut vs ASHPPeak increase vs ASHPApproved pilot
-30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% Winter peak cut vs ASHP, % (pp. 79-80). Left of 0 = higher peak than ASHPs UTEN vs ASHP kW Rockefeller Ctr 32% 2,491 vs 3,658 Buffalo 17% 1,217 vs 1,464 Ithaca 33% 273 vs 408 Troy 35% 1,142 vs 1,748 Haverstraw West 36% 408 vs 641 Brooklyn 66% 1,308 vs 3,810 Haverstraw East 41% 814 vs 1,369 Poughkeepsie 27% 366 vs 500 Syracuse 41% 4,200 vs 7,082 Mount Vernon 33% 840 vs 1,258 Chelsea -23%: higher peak than ASHPs 368 vs 300
Rockefeller Ctr Con Edison · 2,491 vs 3,658 kW 32% Buffalo NFG · 1,217 vs 1,464 kW 17% Ithaca NYSEG · 273 vs 408 kW 33% Troy NMPC · 1,142 vs 1,748 kW 35% Haverstraw West O&R · 408 vs 641 kW 36% Brooklyn KEDNY · 1,308 vs 3,810 kW 66% Haverstraw East O&R · 814 vs 1,369 kW 41% Poughkeepsie Central Hudson · 366 vs 500 kW 27% Syracuse NMPC · 4,200 vs 7,082 kW 41% Mount Vernon Con Edison · 840 vs 1,258 kW 33% Chelsea Con Edison · 368 vs 300 kW -23% higher peak Peak cut vs ASHP, % (pp. 79-80). Left of the line: higher peak.

Budget growth, 2023 to Stage 2

  • Total forecast, all pilots: $413.42M (2023 proposals) to $1,138.76M (Stage 2) (Appendix A)
  • The 2023 proposals gave one figure, $45.50M, for both Haverstraw loops
  • So this chart combines East ($68.00M) and West ($50.10M): $118.10M
Initial forecast, 2023Final forecast, Stage 2Includes an approved pilot
$0M $50M $100M $150M $200M Forecast pilot budget, $ million (Appendix A) growth multiple, Gaiergy calculation Mount Vernon Con Edison $51.4 $191.7 3.7x Syracuse NMPC $66.8 $143.7 2.2x Poughkeepsie Central Hudson $17.4 $131.0 7.5x Rockefeller Ctr Con Edison $58.4 $128.2 2.2x Brooklyn KEDNY $67.7 $125.5 1.9x Haverstraw, both loops O&R · West Loop approved $45.5 $118.1 2.6x Chelsea Con Edison $62.4 $95.5 1.5x Troy NMPC $12.3 $90.9 7.4x Buffalo NFG · approved $16.0 $61.4 3.8x Ithaca NYSEG $15.6 $52.5 3.4x
Mount Vernon Con Edison 2023: $51.4M Stage 2: $191.7M (3.7x) Syracuse NMPC 2023: $66.8M Stage 2: $143.7M (2.2x) Poughkeepsie Central Hudson 2023: $17.4M Stage 2: $131.0M (7.5x) Rockefeller Ctr Con Edison 2023: $58.4M Stage 2: $128.2M (2.2x) Brooklyn KEDNY 2023: $67.7M Stage 2: $125.5M (1.9x) Haverstraw, both loops O&R · West Loop approved 2023: $45.5M Stage 2: $118.1M (2.6x) Chelsea Con Edison 2023: $62.4M Stage 2: $95.5M (1.5x) Troy NMPC 2023: $12.3M Stage 2: $90.9M (7.4x) Buffalo NFG · approved 2023: $16.0M Stage 2: $61.4M (3.8x) Ithaca NYSEG 2023: $15.6M Stage 2: $52.5M (3.4x) $ million (Appendix A). Multiple is a Gaiergy calculation.
  • Growth multiple: final forecast divided by initial forecast (Gaiergy calculation)
  • Initial: proposals filed January to July 2023
  • Final: Stage 2 filings; NFG updated to its latest figures (Appendix A notes)

Other findings

Points from the order's discussion (pp. 47-84) that shape what comes next, beyond the per-pilot costs.

No clear path to grow

  • No expansion shown without material added capital (pp. 75-77)
  • "No utility articulates a clear pathway" to OpEx parity (pp. 75-77)

Grid value: real but not credited

  • Energy use falls 44% to 69%; greenhouse gas 41% to 96%, vs BAU (pp. 59-60)
  • No utility valued avoided gas or electric infrastructure (p. 83)
  • PSC: that value is "most likely not zero," but it gives no credit (p. 83)
  • No pilot actively shifts peak (p. 82)

Gas peaking is on the table

  • No pilot used central fossil peaking (p. 78)
  • PSC: it could cut cost a lot and does "not preclude" full electrification later (p. 78)
  • NYSERDA-cited study: gas peaking cuts borefield size and costs "by 50 percent" (p. 78)
  • Geothermal still meets "over 90 percent" of the annual heating load (p. 78)
Borefield, all-geothermal100% Borefield, with gas peaking50% Annual heat from geothermal>90%

Equity case not made

  • Paying for customer equipment "would not be a sustainable model beyond the pilot" (p. 84)
  • Proposals "do not demonstrate UTENs as a more affordable and equitable form of electrification" (p. 84)

Redactions drew objections

  • Central Hudson, KEDNY and NMPC Syracuse did not file unredacted LCCA workpapers (pp. 47-49)
  • NYSERDA, NY GEO, HEET and others objected (pp. 47-49)

Who pays

How the order recovers pilot costs, for the 9 stopped pilots and the 2 approved pilots (pp. 145-161; Ordering Clauses 3-10).

WHOSE COSTS HOW THEY ARE RECOVERED WHO PAYS 8 stopped pilots: Stage 1-2 Central Hudson, Con Edison x3, KEDNY, NMPC x2, NYSEG Buffalo: approved Deferral capped at $61.4M less state funds (p. 154) Stages 1-5 West Loop: approved Deferral capped at $50.1M less state funds (p. 157) Stages 1-5 East Loop: stopped Stage 1-2 costs not split between the 2 loops (p. 158) Deferral (pp. 149-153) Deferred, capped at authorized maximums, with carrying charges; collected in later rate cases NFG surcharge (pp. 154-156) Delivery Adjustment Charge, $/Mcf From Jan 1, 2027; reset each Oct 1 Cap: 1.0% of prior-year gas revenue O&R surcharge (pp. 157-160) Energy Cost Adjustment From Jan 1, 2027; reset each Jan 1 Cap: 1.0% of prior-year electric revenue Gas customers of each of those utilities All NFG gas customers through the gas bill All O&R electric customers electric, not gas (p. 158) $93M state funds Sustainable Futures Program Lowers what is collected Split not set (pp. 153-154) reduces
  • Stopped pilots: prudent Stage 1-2 costs are deferred, up to authorized maximums (pp. 149-153)
  • They are collected from gas customers only, in later rate cases (pp. 149-153)
  • Exception: O&R's Stage 1-2 costs cover both Haverstraw loops (p. 158)
  • O&R electric customers pay them with the West Loop costs (Clause 6, p. 203)
  • NFG's request for symmetrical reconciliation was denied (p. 155)
  • Both utilities also pursue tax credits and non-ratepayer funds (p. 154)

What the 2 winners do before they build

Buffalo, NFG

  • Sewer wastewater heat, central heat pumps (p. 120)
  • Four-pipe hot and chilled water (p. 120)
  • Serves Shoreline Apartments and Buffalo City Court (p. 120)
  • Conditions: Clauses 12-15, pp. 161-174
File a Stage 3 Customer Protection Planwithin 120 days, ~Feb 12, 2027 estimate
Enroll the City of Buffalo and Beacon Communities
Get Buffalo Sewer Authority approvals
Sign all land and borefield agreements, or redesign with no borefield
Refine the flat monthly thermal fee with Staff (pp. 166-167)
The fee is based on the 3-year average gas bill (pp. 166-167)
HEFPA protections, a UTEN hotline and language access (pp. 163-165)
Union labor (p. 173)
O&M: NFG's union workforce, IBEW Locals 2154 and 2199 (p. 174)
Risk: parkland alienation law, expected in the 2027 session (p. 120)
Risk: DOH and SPDES permits (p. 120)
Risk: no thermal storage (p. 120)

Haverstraw West Loop, O&R

  • 2 borefields plus a wastewater force main (p. 144)
  • Up to 29 buildings (p. 144)
  • Includes government buildings and an elementary school (p. 144)
  • Conditions: Clauses 16-19
File a Stage 3 Customer Protection Planwithin 120 days, ~Feb 12, 2027 estimate
Enroll customers for at least 50% of forecast load (pp. 183-184)
O&R proposed15% PSC minimum50%
The PSC found 15% "insufficient".
Get Joint Regional Sewerage Board approval
Sign agreements with the Village of Haverstraw
Define a customer cost guarantee with Staff (pp. 179-180)
Project labor agreement with the NYS Building and Construction Trades Council (pp. 185-186)
IBEW Local 503 for O&M (pp. 185-186)

Both pilots

  • Monthly progress and expenditure report by the 15th of each month (Clause 7).
  • 30 days' notice to customers before any surcharge change (Clause 10).
  • SEQRA negative declarations issued for both (pp. 195-199).
  • Forecast 25-year emission cuts: Buffalo 20,100 MTCO2e; West Loop 18,875 MTCO2e (p. 200).

Timeline and deadlines, 2022 to 2027

2024 to 2026 Stage 1-2 work (scale break) 2022 2023 2026 2027 Jul 5, 2022 UTEN Act signed (p. 1) Sep 15, 2022 Initiating Order (p. 2 n.3) Jan to Jul 2023 Initial pilot proposals Sep 14, 2023 Guidance Order (p. 3) Oct 15, 2026 This order: 2 approved Nov 20, 2026 RG&E files Stage 1 (p. 189) ~Dec 14, 2026 Stage 1-2 cost reports estimate Jan 1, 2027 Surcharges start ~Feb 12, 2027 Customer Protection Plans estimate ~Apr 13, 2027 Technical conference estimate
  1. Jul 5, 2022UTEN Act signed (p. 1)
  2. Sep 15, 2022Initiating Order (p. 2 n.3)
  3. Jan to Jul 2023Initial pilot proposals
  4. Sep 14, 2023Guidance Order (p. 3)
  5. Oct 15, 2026This order: 2 approved
  6. Nov 20, 2026RG&E files Stage 1 (p. 189)
  7. ~Dec 14, 2026Stage 1-2 cost reports estimate
  8. Jan 1, 2027Surcharges start
  9. ~Feb 12, 2027Customer Protection Plans estimate
  10. ~Apr 13, 2027Technical conference estimate
  • Act signed July 5, 2022 (p. 1)
  • Initiating Order September 15, 2022 (p. 2 n.3)
  • Guidance Order September 14, 2023 (p. 3 n.6)
  • RG&E filing November 20, 2026 (p. 189)
  • Cost reports within 60 days (Clause 4)
  • Surcharges from January 1, 2027 (Clauses 8-9)
  • Customer Protection Plans within 120 days (Clauses 12, 16)
  • Technical conference within 180 days, incl. waste heat exchange (Clause 21; p. 195)
  • After RG&E, the PSC will consider more pilots; stage-gating may change (pp. 189-190)
  • All utilities feed pilot lessons into NYSERDA's TEN Roadmap (Clause 20)

Details and full tables

Appendix A: pilot budgets and costs, $ million

PilotUtilityInitial forecast, 2023Final forecast, Stage 2Max authorized through Stage 2Incurred through Aug 2026
PoughkeepsieCentral Hudson17.40130.991.701.56
ChelseaCon Edison62.4095.538.307.58
Mount VernonCon Edison51.40191.737.106.59
Rockefeller CenterCon Edison58.40128.227.707.07
BuffaloNFG16.0061.403.002.26
BrooklynKEDNY67.70125.496.805.37
SyracuseNMPC66.75143.656.706.31
TroyNMPC12.2790.932.101.99
IthacaNYSEG15.6052.483.483.37
Haverstraw East LoopO&R45.50
both loops		68.004.60
both loops		3.22
both loops
Haverstraw West Loop
approved		O&R50.10
Total413.421,138.7651.4845.32

Carbon abatement cost, $ per MTCO2e (p. 65, Table 4)

PilotUTENIndividual ASHPIndividual GSHP
Poughkeepsie10,602314711
Chelsea15,8042,285n/a
Mount Vernon11,7578073,005
Rockefeller Center3,3831,244n/a
Buffalo4,3421,263n/a
Brooklyn7,4804,284n/a
Syracuse11,048n/an/a
Troy6,283200n/a
Ithaca5,5991,5182,484
Haverstraw East Loop8,254380816
Haverstraw West Loop6,4801,1561,512

Levelized cost of energy (LCOE), $ per MMBtu (pp. 62-63)

PilotUTENIndividual ASHPIndividual GSHPBAU
Poughkeepsie1,912196275149
Chelsea1,248260n/a72
Mount Vernon1,13012632650
Rockefeller Center292156n/a74
Buffalo500197n/a83
Brooklyn508263n/a17
Syracuse320158n/a158
Troy41457n/a46
Ithaca569250336134
Haverstraw East Loop475123144107
Haverstraw West Loop62417821082

Capital cost (pp. 66-68)

PilotCapEx, $M$ per GSFMultiple of ASHP
Poughkeepsie86.55956.5x
Chelsea58.62242.4x
Mount Vernon139.63238.3x
Rockefeller Center98.1271.4x
Buffalo56.51702.9x
Brooklyn112.53562.0x
Syracuse168.9943.2x
Troy77.929510.0x
Ithaca33.62702.8x
Haverstraw East Loop65.41055.6x
Haverstraw West Loop42.12213.8x

Annual operating cost (pp. 70-71)

PilotOpEx, $M per year$ per MMBtuMultiple of ASHP
Poughkeepsie5.1154018.0x
Chelsea6.1861117.6x
Mount Vernon9.6641213.9x
Rockefeller Center7.231234.0x
Buffalo0.94801.9x
Brooklyn4.232512.1x
Syracuse7.241591.3x
Troy3.302383.8x
Ithaca6.501,12033.7x
Haverstraw East Loop3.101533.0x
Haverstraw West Loop1.691883.9x

The LCCAs leave out financing costs, and utility financing "does not operate as an interest-free loan" (p. 74). The PSC notes these costs are therefore "somewhat understated" (p. 74).

Winter peak demand (pp. 79-80)

PilotUTEN peak, kWASHP peak, kWCut vs ASHP
Poughkeepsie36650027%
Chelsea368300-23%
Mount Vernon8401,25833%
Rockefeller Center2,4913,65832%
Buffalo1,2171,46417%
Brooklyn1,3083,81066%
Syracuse4,2007,08241%
Troy1,1421,74835%
Ithaca27340833%
Haverstraw East Loop8141,36941%
Haverstraw West Loop40864136%

Method notes

Sources

Every source cited in this report.

  1. NY Public Service Commission, Case 22-M-0429, "Order Addressing Multiple Utility Thermal Energy Network Pilot Projects," issued and effective October 15, 2026, 208 pages plus Appendices A-C. PDF shared on LinkedIn, accessed 2026-10-21. The order is also filed in the PSC's Document and Matter Management system under Case 22-M-0429.
  2. NY PSC, Case 14-M-0101, "Order Adopting a Ratemaking and Utility Revenue Model Policy Framework" (REV Track Two Order), May 19, 2016, pp. 13, 32. Accessed 2026-10-21. https://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={D6EC8F0B-6141-4A82-A857-B79CF0A71BF0}
  3. NY DPS, National Fuel Gas rate case memo, Case 23-G-0627, December 19, 2024 (return on equity 9.70%). Accessed 2026-10-21. https://dps.ny.gov/system/files/documents/2024/12/nfg-rate-case-post-psc-order-memo-23-g-0627-december-2024_0.pdf
  4. NY DPS, Orange and Rockland Utilities rate case summary, Cases 24-E-0060 / 24-G-0061, March 20, 2025 (9.75%). Accessed 2026-10-21. https://dps.ny.gov/system/files/documents/2025/03/or-gas-rate-case-web-post-gas-rate-case-order-3-20-25.pdf
  5. NY DPS, Con Edison electric rate case summary, Cases 25-E-0072 / 25-G-0073, January 22, 2026 (9.40%). Accessed 2026-10-21. https://dps.ny.gov/system/files/documents/2026/01/con-edison-electric-rate-case-summary.pdf
  6. NY DPS, Central Hudson electric rate case summary, Cases 24-E-0461 / 24-G-0462, August 14, 2025 (9.5%). Accessed 2026-10-21. https://dps.ny.gov/central-hudson-electric-rate-case-summary
  7. NY DPS, National Grid (NMPC) electric rate case summary, Cases 24-E-0322 / 24-G-0323, August 14, 2025 (9.50%). Accessed 2026-10-21. https://dps.ny.gov/system/files/documents/2025/08/national-grid-electric-post-order-rate-case-summary_0.pdf
  8. NY PSC, transcript of the Commission session of August 15, 2024, p. 10, KEDNY and KEDLI rates, Cases 23-G-0225 / 23-G-0226 (9.35% adopted). Session slides, accessed 2026-10-21: https://dps.ny.gov/system/files/documents/2025/01/101_kedny-kedli-session-power-point-final.pdf
  9. NY DPS, NYSEG electric temporary rate summary, May 14, 2026 (9.2%, temporary rates; rate cases pending). Accessed 2026-10-21. https://dps.ny.gov/system/files/documents/2026/05/nyseg-electric-temporary-rate-case-summary_0.pdf
  10. Synapse Energy Economics, "The High Cost of New York Gas Utilities' Leak-Prone Pipe Replacement Programs," March 1, 2023. Accessed 2026-10-21. https://www.synapse-energy.com/sites/default/files/22-017_High_Cost_NY_Gas_Utilities_LPP_Programs_0.pdf
  11. Averch, H. and Johnson, L. L., "Behavior of the Firm Under Regulatory Constraint," American Economic Review 52(5), 1962. Journal article; no free copy is linked.
  12. US Census Bureau, cartographic boundary files cb_2023_us_state_500k and cb_2023_us_county_500k (map outlines). Accessed 2026-10-21. https://www2.census.gov/geo/tiger/GENZ2023/shp/

Acronyms

Acronyms used in this report, plus related New York terms (CLCPA, DPS).

AcronymMeaning
ASHPAir-source heat pump
BAUBusiness as usual (the existing heating and cooling system)
CapExCapital expenditure
Central HudsonCentral Hudson Gas & Electric Corporation
CLCPAClimate Leadership and Community Protection Act (New York, 2019)
CO2Carbon dioxide
Con EdisonConsolidated Edison Company of New York
CO2eCarbon dioxide equivalent
DACDisadvantaged community
DECNew York State Department of Environmental Conservation
DOHNew York State Department of Health
DPSNew York State Department of Public Service (staff to the PSC)
GSFGross square feet
GSHPGround-source heat pump (individual building, not networked)
HEETHome Energy Efficiency Team (Massachusetts nonprofit)
HEFPAHome Energy Fair Practices Act
HPHeat pump
IBEWInternational Brotherhood of Electrical Workers
IDEAInternational District Energy Association
KEDLIKeySpan Gas East Corporation, doing business as National Grid (Long Island)
KEDNYThe Brooklyn Union Gas Company, doing business as National Grid NY
kWKilowatt
LCCALife cycle cost analysis
LCOELevelized cost of energy
McfThousand cubic feet (of natural gas)
MMBtuMillion British thermal units
MTCO2eMetric ton of carbon dioxide equivalent
NFGNational Fuel Gas Distribution Corporation
NMPCNiagara Mohawk Power Corporation, doing business as National Grid
NY GEONew York Geothermal Energy Organization
NYCHANew York City Housing Authority
NYSNew York State
NYSEGNew York State Electric & Gas Corporation
NYSERDANew York State Energy Research and Development Authority
O&MOperation and maintenance
O&ROrange and Rockland Utilities
OpExOperating expenditure
PLAProject labor agreement
PCBPolychlorinated biphenyl
PSCNew York State Public Service Commission (the Commission)
REVReforming the Energy Vision, the PSC proceeding in Case 14-M-0101
RG&ERochester Gas and Electric Corporation
ROEReturn on equity
SEQRAState Environmental Quality Review Act
SFSquare feet
SPDESState Pollutant Discharge Elimination System (water discharge permits)
TENThermal energy network
USUnited States
UTENUtility thermal energy network: a TEN owned and run by a regulated utility