Several electric utilities are providing customers with a choice of billing procedures. Customers can select a time-of-day meter that registers electric usage throughout the day, or they can select a regular meter that registers total usage at the end of the day. With the time-of-day meter, the utility is able to charge customers a much higher rate for peak usage than for nonpeak usage. The regular meter users pay the same rate for electric usage no matter when it is used. Why would the electric utility want customers to choose the time-of-day meter?

We are given two types of billing procedures offered by electric utilities - regular meter and time-of-day meter. The regular meter charges the customers based on their total consumption, regardless of when the electricity is used. In contrast, the time-of-day meter charges customers a higher rate for peak usage times, and a lower rate for nonpeak usage times.

The time-of-day meter has the advantage of encouraging customers to limit their electricity usage during peak hours, which is when the demand is the highest. By offering a higher rate for electricity usage during these peak hours, customers are more inclined to reduce their consumption or shift to nonpeak hours, which helps to balance the overall load on the electric grid.

In the case of the regular meter, customers are not incentivized to lower their consumption during peak hours since the rate remains the same throughout the day. This can result in higher demand during the peak hours, putting more strain on the electrical grid and potentially leading to higher costs for utilities to maintain and manage the grid.

There are several reasons why the electric utility would prefer customers to choose the time-of-day meter: 1. Load management: By encouraging customers to shift their energy consumption from peak to nonpeak hours, the time-of-day meter helps in better managing the electrical grid, avoiding overloading, and reducing the risk of blackouts. 2. Cost savings: Reducing peak-hour demand can lead to cost savings for the utility since they require less investment in equipment and infrastructure to meet the peak demand. 3. Environmental benefits: As reducing peak-hour demand may avoid the need for utilities to run additional peaking power plants, which are often less efficient and more polluting, adopting the time-of-day meter can help in reducing the environmental impact. 4. Promoting energy efficiency: By charging customers a higher rate for peak usage, the time-of-day meter incentivizes customers to become more energy efficient and think about their consumption habits, ultimately saving them money and helping the utility to meet energy conservation goals. In conclusion, the preference of electric utilities for customers to choose the time-of-day meter is mainly driven by efficient load management, cost savings, and environmental benefits.