For the curious, California achieves this by a regulatory measure called "decoupling": a utility's profits are not connected to how much raw energy it sells. In particular, CPUC (the statewide utility regulator) lets electric utilities, both municipal (e.g. SMUD) and investor-owned (e.g. PG&E), charge higher rates if they implement energy efficiency or demand-side management measure to reduce total demand, allowing the utility to maintain about the same level of profitability but at reduced energy consumption. It's pretty cool.
[1] in 2012, from EIA data, CA paid $0.15/kWh rate and $88 average monthly bill mo whereas the national average was $0.12/kWh and $107/mo. Slides from Jane Woodward.