Electricity: The New Math

One of modern life's most durable features -- fixed-price electricity -- is slowly being pushed to the sidelines, a creeping change that will influence such things as what time millions of Americans cook dinner and what appliances they buy.

Driving the change is the rollout of so-called smart meters, which can transmit data on how much power is being used at any given time. That gives utilities the ability to charge more for electricity at peak times and less during lulls. Spreading out electricity consumption more evenly across the day leads to more efficient use of power plants and lower emissions. Advanced meters "put consumers in charge of an expense that's often thousands of dollars a year and in ways that were never possible before," said John Geary, vice president of innovation for TXU Energy, a Texas power seller. "They won't be flying blind anymore." Utilities, economists and even behavioral psychologists are still trying to figure out the best way to convince consumers to cut their power at the right time. They worry that folks will be in for a jolt if they suddenly are exposed to wildly fluctuating prices—possibly prompting a smart-meter backlash. But if prices don't change, it would undercut the purpose of rolling out the costly smart meters in the first place.


Electricity: The New Math