Responding to Adam McHugh's query, an early use of the concept is in Henry
George, 1898, *Science of Political Economy*: "Value is but an expression of
exertion avoided" (George, 1898, p. 249).  The Federal Energy Regulatory
Commission (FERC) has made good use of this concept, making electric
utilities buy co-generated power from independent sellers at a price equal
to "avoided cost."

In each case the wording differs, but the concept is used.

I can't guarantee George was the "first". 

Detail: George died in 1897; his *Science* book was published a year later.

Mason Gaffney