New Gadgets
Utilities are shifting focus from selling electrons to providing higher-profit services like installing programmable thermostats and retrofitting buildings with windows, insulation and roofing that use less energy, Hesser said. As those efforts boost conservation, "that would further sink demand, and a cycle is born," he said.
To be sure, the advance of smart meters that allow utilities to track a consumer's power use in real time could be deterred by privacy concerns or technical glitches such as a rash of house fires that caused Exelon Corp.'s PECO utility to suspend its meter rollout in August.
A surge in the economy might also prompt power use to rebound as it did after declining when the U.S. plunged into recession in 2008 and 2009.
The 4.4 percent uptick in U.S. power consumption in 2010 was followed by a 0.8 percent decline in 2011, the U.S. Department of Energy said in a Sept. 11 report.
Conservation Driver
"Was the economy worse in 2011 than in 2010? No, it was growing," Paul Patterson, a New York-based utilities analyst with Glenrock Associates, said in a telephone interview. "Clearly you have conservation and appliance efficiency pushing a lot of this."
The trend is causing regulators to question the need for building more transmission lines, a source of earnings for power companies since federal regulators allow returns on infrastructure investment that can top 12 percent.
PJM Interconnection LLC, which manages the electric grid in 13 states and the District of Columbia, in recent months asked power companies to cancel a planned $2.1 billion transmission line and freeze another $1.2 billion project after determining the lines were no longer needed to import electricity to Maryland, Delaware and neighboring states.
Lower demand is also helping drive wholesale power prices to near-historical lows in PJM's territory, the largest competitive U.S. power market, and "could be a very troubling trend" for independent generators that can't rely on regulated rates, Patterson said.
Who's Hurting