(Reuters) - New York energy company Consolidated Edison Inc said on Friday it still plans to impose a moratorium on new natural gas service in parts of Westchester County after March 15 despite a $250 million plan by the state to reduce energy usage.

A logo of New York power utility Consolidated Edison Inc is seen in New York July 1, 2012. REUTERS/Eric Thayer

“The moratorium will still go into effect after March 15,” Con Edison spokesman Allan Drury said, noting the company needs to stop hooking up new gas customers to avoid compromising gas system reliability because of limited space on existing interstate pipelines into the region.

Westchester County is north of New York City.

New York State has blocked construction of new interstate pipelines for environmental reasons for years as Governor Andrew Cuomo and other state officials want utilities to focus more on renewable power sources and energy efficiency programs, instead of building more gas and other fossil fuel-fired power plants and infrastructure.

Consumers, however, want access to more gas to heat homes and businesses because it is cheaper and cleaner to burn than oil. This winter, U.S. Northeast households, on average, are expected to spend $723 to heat with gas and $1,646 with oil, according to federal estimates.

Drury said Con Edison has received more than 1,300 applications for new gas hookups since notifying the state of the moratorium on Jan. 17, well above the number the company normally receives during a two-month period.

On Thursday, the state announced several steps totaling $250 million to reduce energy consumption and fund alternative energy programs.

The state said the programs will “provide immediate relief to Westchester County businesses and residents affected by Con Edison announcement that it will put new applications for firm natural gas service on a waiting list beginning March 15.”

The programs, which are estimated to reduce energy consumption equivalent to the amount of gas needed to heat over 90,000 homes, include funding for clean energy alternatives like electric heat pumps and high-efficiency appliances.

The problem with those programs is they only reduce demand, not boost gas supplies.

To provide gas to more customers and maintain system reliability, Con Edison has said it needs more programs to reduce demand and more interstate pipelines and storage facilities.

Several energy companies have tried for years to build gas pipelines from the Marcellus shale in Pennsylvania to New York, but regulators in Albany have denied some of those projects, like Williams Cos Inc’s long-delayed Constitution pipeline.