The oil and gas shortages of the 1970s were caused by government interference.

But the mainstream news media hyped the concept of “running out” of resources.

This brought politics into energy.

With a goal of energy independence, all sorts of federal boondoggles were started.

Since the electric utility industry faced restrictions on coal and natural gas, nuclear generation appeared to be the best option.

Utilities such as SCANA and Santee Cooper exhibited a lemming-like propensity for doing the wrong thing.

SC utility regulators encouraged what turned out to be such expensive investments as the failed $9 billion SCANA-Santee Cooper nuclear fiasco that cost ratepayers $2.2 million and investors the rest.

PRICE SHOCKS from the oil and power markets made energy efficiency measures attractive. The market poured forth new devices and improvements in energy use that greatly reduced energy intensity. Corporate managers faced new energy-control products that continues increasing.

Along with market response to high energy prices, new laws complicated energy use. Natural gas was discouraged in industry. Gas supplies were perceived by policy makers as a soon-to-be-exhausted resource. Some industries switched to electricity.

In such cases overall efficiency took a back seat to conserving natural gas. Tax credits influenced energy investments. Saving energy had patriotic implications. Building codes now included energy standards.

UTILITY MANAGERS lost confidence from the shock of nuclear plant cost overruns. During this moment of weakness, utility regulators came up with the concept of a public policy: If the utilities invested in energy efficiency then they would not need to build so many power plants.

In regulatory circles the new buzz words were “least-cost planning” and “demandside management.” The utilities had the good sense to be suspicious of the grandiose claim that efficiency improvements would slow the overall demand for energy. But they were soon bought off with promises of guaranteed profits on approved but expensive efficiency programs.

IN THE 1980S and early 1990s, economists pointed out the flaws of asking providers to reduce their own sales. With amazing accuracy, economists predicted failure.

Utilities spent billions of ratepayers’ dollars on demand-side programs with little to show for it but inflated claims. The money, of course, came from their customers.

Those who had invested in energy efficiencies were taxed to pay for the same improvements in their competitors’ facilities.

According to economist Franz Wirl, the utilities and customers gamed the system of giveaways for efficiency measures.

Then a wave of rationality struck the electricity industry. Competition for customers was instituted in many states and planned in still more. Customer choice akin to that in telecommunications was seen as the wave of the future.

The regulated utilities began the wholesale dumping of their wasteful customer efficiency programs. In the industry this was known as “getting trash off the books.”

Mr. Clarkson is an energy consultant.