Contrary to common assumptions, utilities financial benefit from energy efficiency. Demand side management programs run by utilities can help by deferring massive capital investments in new power plants and easing the strain on parts of the transmission system. The Energy Information Administration projects a levelized cost of electric production between $0.063/kwh for coal powered plants and $0.311/kwh for solar thermal plants put into service in 2016, while utilities investments in energy efficiency can cost less than $0.04/kwh.
State and regulatory policy can facilitate utility innovation. For example, House Bill 1037 in Colorado, encouraged investor-owned utilities to invest in demand side management (energy efficiency) programs through a energy efficiency standard mandate to meet at least 5% reduction of the utilities retails sales (2006 benchmark) by 2018. Additionally, the Colorado Public Utilities Commission has the authority to allow financial incentives for the utility and investors for implementing cost effective energy saving programs.
Programs initiated by cities have supported the adoption of energy efficiency through public education and access to a skilled workforce. For example, across Colorado, Denver, Boulder, Gunnison, Pitkin and Eagle counties alone have supported more than $10.7 million in energy efficiency building retrofits, with energy savings for more than 1,000 businesses and 6,000 homeowners. Average estimated savings from these programs for businesses and homes are $1,200 and $200 per year, respectively. This savings has supported local reinvestment with long term returns, while helping the growth of the industry to more than 14,167 jobs in Colorado.
Source: Read the Colorado Energy Efficiency "State of the State" Report for further explanation of data collected prior to July 4, 2012