Information technology and efficient pricing: Providing a competitive edge for electric utilities

Electricity has traditionally been generated and sold as a homogeneous commodity with a single price. This practice has less to do with the nature of electricity than with the lack of technology to distinguish among each kilwatthour based on what- and when - it is used. This article argues that with the recent advances in information and communication technologies, the time has arrived to market electricity as something other than a homogeneous commodity. By pricing electricity according to its time-of-use, for example, electricity will be more efficiently utilized, benefitting both the customers and the electric companies.