As happens every summer there is a demand from both utilities and government for people to use less power. If you stop and think about it this is rather strange. How many other goods or services can you think of where this also happens? I can think of one -- water -- another public utility. Why is this? Well, for most things, when demand increases so do prices, which act as a signal to consumers to be more judicious about how much they purchase.
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Electric companies, however, are often governed by strict regulations that require they use flat-rate pricing, meaning that they have to charge the same price regardless of demand. The result is that it costs just as much to blast your AC, TV and stereo on a scorching hot day as a mild one. The simple solution to solving these perennial electric problems is variable pricing -- let the markets work.
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