For many years, so-called free marketers have insisted that the key to driving costs down, creating competition, and generally improving efficiency in the electric market means deregulation of energy companies. Of course, the Enron debacle and the 2000-01 California energy crisis have provided a sharp education that deregulation is not the best way about bringing free markets to electricity consumption.
Instead, it's time to try smart meters on a large scale. By allowing consumers to see the exact price they are paying for electricity at any given time, smart meters allow customers to tailor their electricity usage to off-peak hours, when utilities generally have excess capacity. The difference between peak and off-peak rates is 10 cents per kilowatt-hour for one Colorado utility, but can be as much as 40 cents per kwh (the average retail rate for electricity is around 11 cents/kwh).
In other words, consumers can choose to do laundry, wash dishes, or charge portable electronics at night, when rates are very low, and minimize their use during the day. Not only do households save money, but utilities can more effectively balance their load, reducing the need for new power plants. That's a win-win.
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