Water Heater Energy Efficiency Tips

Make sure water heater is set at the lowest point. Try setting it at 120 degrees.
Try washing clothes with warm water and rinsing with cold.
If your water heater is located in an unconditioned space, consider installing a thermal wrap around it.
Consider buying a new energy efficient water heater. While it may cost more initially than a standard unit, the energy savings will continue during the lifetime of the appliance. Most electric cooperatives offer incentives to reduce the costs of a replacement.
Although most water heaters last 10-15 years, it's best to start shopping for a new one if yours is more than 7 years old. Doing some research before your heater fails will enable you to select one that most appropriately meets your needs.
Drain a quart of water from your water tank every 3 months to remove sediment that impedes heat transfer and lowers the efficiency of your heater. The type of water tank you have determines the steps to take, so follow the manufacturer's advice.
Try to use less hot water overall. This helps keep your costs down.

Water Heater Savings Resources:

Touchstone Energy - Home Energy Savings Guide
Learn more about energy efficiency for all areas of your home

Water Heater Tips #2 from the US Department of Energy
http://www.energy.gov/waterheating.htm

Marathon Water Heater. This company manufactures energy efficient water heaters and works with many electric cooperatives across the county. http://www.marathonheaters.com/cons_howtobuy.html