What on earth could the Edison Electric Institute, the national trade association of private electric utilities, be doing consorting with the likes of the Natural Resources Defense Council, the Alliance to Save Energy and the Energy Futures Coalition in jointly proposing the Energy Efficiency and Economic Recovery Initiative to the incoming Obama Administration?

Those to whom this seems like an unholy alliance may not be aware of the nearly 25 years of collaboration between progressive elements in the utility industry and groups such as NRDC and ASE around issues such as energy efficiency, demand-side management and integrated resource planning.

In the mid '80s, when yours truly got into the field, there were a relatively limited number of forward-thinking power companies sprinkled in states such as California, New York and the Pacific Northwest region that were beginning to appreciate energy efficiency as a resource and actually using programs in the commercial and residential sectors to build "conservation power plants." According to the California Energy Commission, the state has met over 15 percent of its demand growth since 1973 through these programs, which have resulted in flat per capita electricity use in the state, as compared with 50 percent growth in per capita energy use nationwide.

The concepts of demand-side management, such as utility-sponsored energy efficiency and load reduction programs, and integrated resource planning, which treats supply- and demand-side options side by side when determining the most cost-effective way to meet energy needs, have been rediscovered and promoted nationwide, most famously by Duke Power's Jim Rogers. Xcel Energy's programs that expect to "generate" 694 Megawatts of savings, principally in residential and commercial buildings (or "Negawatts" as Amory Lovins would call them) are a perfect example of this approach. Xcel also is investing in "fuels from heaven," as coined by Rochelle Lefkowitz, to the tune of 1,000 MW of renewable energy. Clearly, they strive to “xcel” in a 21st century energy system. Way to go!

Xcel's energy efficiency programs come in at an astonishing $100 per kilowatt. Compare this with $4,000/KW for nuclear, $1,500-$4,000 (conventional to IGCC with CCS-carbon capture and storage) for coal, $800-$1,600 for gas and $1,200 to $1,600 for wind. In addition, every dollar invested in energy efficiency provides significantly more employment than a dollar invested in generation capacity as evidenced by the 1.5 million jobs created by energy efficiency in California.

Rob Watson is the Executive Editor of GreenerBuildings.com, and the chairman, CEO and Chief Scientist of the EcoTech International Group.