New technologies are allowing utility customers to reduce their energy consumption and, thus, save money. But every penny they save is a penny that doesn't go to the local utility. The trend toward "green" could limit demand growth in the utility sector for years to come.

An honored leader
Staples (SPLS) was recently honored by the U.S. Department of Energy (DOE) for steps it's taken at its Coppell Fulfillment Center in Texas. The DOE commended the office supply retailer as a leader in, "energy efficiency" for its efforts to curtail energy use and improve its green footprint.

(Source: Anthony92931, via Wikimedia Commons)

Staples made such mundane changes as installing LED lights in loading docks and putting up highly efficient fans, among other things. In total, Staples was able to, "...cut the Coppell Fulfillment Center's energy costs by 26 percent annually and saved more than $65,000 on energy bills." That's wonderful for Staples and its shareholders, but it's money that no longer goes to the local electric company. Worse, "Staples is now implementing these strategies at other fulfillment centers across the country."

Not good news
That's not exactly music to the ears of utility CEOs. Imagine if every company was able to reduce energy costs by 26%... Wait, LED lights and efficient fans aren't that expensive or hard to install—other companies can, and will, follow Staples' lead.

For example, The Hartford Financial Services Group (HIG -0.77%) just received a Climate Leadership award from the Environmental Protection Agency (EPA) for exceeding its greenhouse gas emissions targets. One highlight of that effort was, "...implementing LED lighting technology."

Hasbro (HAS -0.09%) also won an EPA award for setting and meeting aggressive "green" goals. It plans meet its goals, "...through replacing existing roof insulation with more energy efficient materials, making HVAC upgrades and replacements, converting from fuel oil to natural gas, and replacing hydraulic molding machines with electric machines." That's a little more involved than using new light bulbs, but Hasbro is hardly taking heroic efforts to save energy.

A little goes a long way
Staples, The Hartford, and Hasbro show how simple it is to go green and save some green on utility bills. Public utilities are happily talking up conservation efforts, but how happy can their CEOs be that key customers are cutting back energy use by as much as 26% by making simple changes?

For example, industrial customers were a highlight for Southern Company (SO 0.62%) in 2013. That segment of the company's customer base saw an increase in demand of 1.5% year over year. Residential demand was up a scant 0.2% and commercial demand was down 0.9%. Southern is expecting industrial sales growth to lead again in 2014, pacing in at 1.1%.

(Source: Emmanuel Huybrechts from Laval, via Wikimedia Commons)

If all of Southern's industrial customers starting going "green" like Staples, Hasbro, and The Hartford, that number could fall short of expectations. That, in turn, would limit top and bottom line growth. Not just for one year, but year after year. It would set a new baseline. Industrial and commercial customers accounted for nearly 60% of the electricity Southern sold in 2013.

Watch this trend
Clearly utilities aren't going the way of the buggy whip, at least not yet. But their businesses are changing. So you should keep a close eye on the green trend and its impact on utilities. And giant Southern is hardly alone. Similarly large Duke Energy (DUK 0.07%) sold more than half of the electricity it produced in 2013 to industrial and "general service" (commercial) customers.

While both Duke and Southern have been pushing customers to conserve, and working to get more "green" themselves, there's a bottom line impact. Right now the economy continues its slow recovery from the 2007 to 2009 recession, helping to support demand from industrial and commercial customers. However, once that's run its course, don't be surprised if a new, lower level of growth is the norm.

There's another big energy trend taking place in the United States, too...