Funny how you always dismiss it in favor of your gut whenever it is convenient for you.
What we are talking about is similar to the dilemma created by having highways funded with gasoline taxes while trying to move away from gasoline. In that case the perverse incentive works to create a shortfall of funding if the policy objective of moving to electric vehicles is achieved.
When the problem in the electric industry is written about it is in my experience most often in the context of trying to find a way to allow utilities to meet their obligations if they implement strong energy efficiency measures (YMMV). I don't know of a paper that I can post that specifically focuses on this point but it is a fundamental element in the regulation of utilities so you should be able to find it discussed (not focused on) in various places like DOE, ORNL, FERC and NREL.
Here is a snip from one brief article out of Oak Ridge:
http://www.ornl.gov/info/ornlreview/rev28_2/text/uti.htmWhy Utilities Run DSM Programs
At first glance, it seems ridiculous for a company to encourage its customers to use less of its product. Does General Motors urge us to carpool and keep our cars longer? Does Pizza Hut tell us to eat more vegetables and fruits and avoid fatty cheeses and meats?
Electric utilities are different in three ways. First, they are regulated monopolies. If you don't like Sony stereos, you can always buy from Zenith or Panasonic. But if you don't like your local utility, you have to move outside its service area to be able to buy electricity from another entity. Because of utilities' monopoly status, they are regulated by state agencies, the public utility commissions. Second, electricity is considered a necessity "clothed with the public interest." Third, the production and transmission of electricity cause serious environmental problems, including emissions of greenhouse gases.
Utility experience during the past several years shows that DSM programs provide resources that cost-effectively substitute for power plants. That is, direct-load-control programs and interruptible rates provide the same types of services that a combustion turbine does but at lower cost. Similarly, energy-efficiency programs are often low-cost alternatives to the construction and operation of baseload coal and nuclear plants.
The recognition that DSM is a "resource," analogous to power plants, led to a new way of planning for electric utilities, called integrated resource planning (IRP). IRP involves utility consideration of a broad array of ways to meet customer energy-service needs, rather than only building and operating power plants. Utilities now consider purchasing electricity from other utilities and from nonutility entities, repowering and extending the life of existing plants, DSM programs, transmission and distribution improvements, and pricing as alternative ways to meet the growing demand for energy services.
Some questions that you don't need to answer point by point, they are really just to guide the thought process:
1) Why are utilities regulated?
2) How are their profits determined by the regulators?
3) What is the basis of their revenue stream?
4) What happens to their obligations if their revenue stream declines due to reduced consumption as a result of mandated energy efficiency measures?
5) With all other things being equal how does anyone make more money selling less product?
6) What are the differences between large scale thermal and renewable energy projects in how economies of scale are achieved?
We can provide regulatory patches such as demand side management but those cases where that is most valuable are for avoiding having to build new large scale thermal generation. If large scale generation *is* built (such as nuclear), it needs to be paid for - and that drives utilities to fight energy efficiency measures as strongly as they can.
The cases like PG&E where there has been success in broadly reducing consumption are tied to commitments to exploit renewable energy resources. (And even they are hamstrung by the need to balance increased rates for reduced consumption against their existing financial commitments.) Overall utilities spend only around 1% of their money on reducing consumption; efforts that are based on avoided costs criteria with targets that seldom result in significant long term deflections of the demand curve.
To achieve those reductions we need to bring the consumer closer to the *total* costs of generation or to have regulators that are strongly committed to the goal over a long period of time. Some examples of measures that move in the consumer direction are time of day pricing or readouts on appliances that give instant feedback on the costs of running them. The smart grid will help a lot in widespread implementation of those information based measures.
As far as long term sustained effort by a national/global hodgepodge of regulators it is, quite frankly, nearly impossible to imagine.
Of course, the best way to bring the consumer closer to the total costs of their electricity is when they generate it themselves as part of a distributed grid.