Smart (Market-based) vs. Dumb (Flat-Rate) Pricing
Most residential and commercial customers still pay their electric utility a flat rate (national average of 9 cents per kilowatt hour) multiplied by the kilowatt hours they use. That 's an example of a "dumb grid."
But with a smart grid in place, a utility can restructure rates, and then offer all its customers products that allow either the customer, or the utility, to control usage based on demand and hourly rates.
For example, maybe you 'd be ready to put off running your dishwasher until 3 a.m. if you could do it with electricity costing 5 cents a kilowatt hour, instead of 25 cents during the day at times of peak demand.
Read more about the increasing use of "smart grids" in Forbes.com.