Duke Energy CEO James Rogers gets paid for building power plants and selling electricity. “What if I told you I want to be paid for every watt I save,” he asks rhetorically.

Rogers is an unlikely poster child for decarbonizing the nation’s energy supply. The North Carolina utility chief heads a company serving five states that is the third largest CO2 emitter in the country.

Yet he’s convinced that the prevailing notion of how we meet energy demands needs rethinking. “There is another path that can help us achieve our country’s goal of reliable, affordable and clean energy for all – energy efficiency,” he said in an address last November to business leaders in Sarasota. “As the ‘fifth fuel,’ it can be as useful in meeting our growing energy demands as the traditional generation sources of coal, nuclear, natural gas or renewable energy.”

Even as headlines focus on new technology, old-fashioned conservation is still the fastest, most economically feasible option to addressing greenhouse gases, adds Stephen Smith, executive director of the Southern Alliance for Clean Energy.

“There’s a lot of low-hanging fruit out there that is yet to be realized,” he says. “We’re not doing everything we can to address energy conservation where the technology is proven and the return on investment can be easily calculated.”

A large part of the problem is an archaic rule called the rate impact measure that doesn’t count aggressive conservation initiatives as part of the formula used by the state’s Public Service Commission to determine the rates a utility can set. “Under the old business model, utilities focused on selling as much energy as possible and building power plants that expanded their asset base,” Smith says. “Today, it’s very short-sighted to think that it’s bad when utilities lose sales.”

“We need a future that puts investments in energy efficiency on an equal footing with new generation investments, so that a utility is able to achieve the same earnings when they make or save energy,” Rogers says, who’s promoting regulatory reform.

New technologies for air conditioning, refrigeration and lighting developed over the past three to five years offer phenomenal opportunities for return, but consumers don’t necessarily know about conservation technologies and utilities don’t feel the need to promote them, Smith said. For instance, “vampire loads,” caused when multiple electronic devices are plugged in or charging but not actually in use, may boost total power consumption by 5-10%.

SACE is working with state government at multiple levels, including the governor’s office, legislature and PSC to review the regulatory climate. Laws on the books dating back to the 1980s would allow utilities to invest in conservation but the legislation has been misinterpreted, he said. “We’re in the process of educating elected officials because most haven’t realized that energy efficiency can be such an important element in the effort to reduce greenhouse gases.”

While some utilities, including TECO, have created high-visibility promotions for energy audits, rebates on energy-efficient windows, insulation and air-conditioning ducts, they could go further, Smith said. “We’d like to see programs like buy-backs on refrigerators because even a three-year-old refrigerator isn’t as efficient as a new model.”

In that particular case, buy-backs rather than rebates will be important because people are likely to put their old refrigerator in the garage and run both instead of saving energy with a newer model.

An example of aggressive conservation initiatives is underway in California where three investor-owned utilities in California have been told to reduce their combined energy usage by the equivalent of three power plants. They’ll earn up to $450 million each for meeting the target – or be penalized if they don’t. One of the biggest utilities is subsidizing the cost of compact fluorescent lamps (CFLs) now being sold for as little as a quarter or distributed free through organizations like the Girl Scouts and the Sierra Club.

“We need a paradigm shift in Florida away from build, build, build new plants,” Smith said. “Every option, even renewable energy, has some impact, but there is very little downside with the focus on energy efficiency.”