New Jersey regulators on Wednesday approved an energy-efficiency plan allowing Public Service Electric & Gas to spend nearly $1 billion over three years to get customers to reduce their energy consumption with thermostats, LED lighting, and energy-efficient appliances at discount prices.

The plan, which the utility called “the largest commitment to energy efficiency ever in New Jersey,” would direct about $284 million to residential customers and $686 million to commercial and industrial customers. It is a scaled-down version of the Clean Energy Future proposal that PSE&G announced in 2018, which would have spent $2.8 billion over six years on energy efficiency.

The plan includes elements aimed at low-income residents, multifamily developments, small businesses, and local governments and nonprofits.

New Jersey’s ratepayer advocate and large industrial users had initially greeted PSE&G’s effort with wariness, suggesting that the competitive market might provide energy efficiency more effectively than a utility that generates guaranteed profits through higher rates. The utility cut back its original proposal of 22 energy-efficiency programs to 10 to reach an accord with critics who worried that its proposals were too ambitious and expensive.

PSE&G said that residential customers will see their combined gas and electric bills increase by $1.27 a month in 2025, or less than 1%, to pay for the programs. But a customer who takes advantage of the full gamut of offerings — installing a discounted smart thermostat, energy-efficient heating and air-conditioning, a smart power strip, and LED light bulbs — could realize a bill reduction of $17 a month, or 9%, said Michael Jennings, a utility spokesman.

The company said the program will deliver $1 billion in net customer savings, create 3,200 direct jobs and 1,100 more indirect jobs, and will help New Jersey avoid eight million metric tons of carbon emissions through 2050.

The Clean Energy Future proposal is PSE&G’s latest plan to ramp up infrastructure investments. The company said its plan was a “vital step” toward achieving Gov. Phil Murphy’s clean energy agenda, which calls for New Jersey to rely on 100% clean energy by 2050.

The energy-efficiency plan was part of a larger $4.1 billion package that included proposals to spend $364 million for electric-vehicle infrastructure, including support for nearly 40,000 EV chargers, $180 million for massive utility-scale battery storage, and $800 million for an “Energy Cloud” program that includes the installation of wireless smart meters in every customer’s home.

Those proposals, which have generated opposition, are still pending before the Board of Public Utilities.

In a related matter, the BPU approved a $365 million budget for the state’s Clean Energy Fund, which is financed through a statewide surcharge on energy bills to pay for clean energy programs. The budget represents a 5.5% increase over last year’s budget. But environmentalists complained that the Murphy administration, continuing a practice begun under former Gov. Chris Christie, diverted nearly $200 million from the fund to plug holes in the state’s budget.

“The Clean Energy Fund has become the state’s slush fund,” said Jeff Tittel, director of the New Jersey Sierra Club. “Instead of using the money for clean energy and green jobs, New Jersey keeps using the money to balance the budget.”