controlling electricity usage

http://money.cnn.com/2007/02/27/news/economy/smart_meters/index.htm?postversion=2007022715

Peak minutes: Buying electricity like phone service

This article discusses the introduction of the new 'smart' meter- a different way to control electricity usage. 'Smart' meters allow customers to see how much they are paying for electricity at certain hours of the day and let them choose when to turn the electricity on or off. It's as easy as setting your spending limit to 20 cents a kilowatt hour for your air conditioning during the day, and having the meter shut when the cost for AC hits 21 cents.

"The hope is the customer will respond to actually seeing the [higher] price," said Kevin Wood, a manager at SCE.

After reading this article I think that this type of control over an elastic good like electricity could be seen as a positive externality. The article points out several benefits of using the 'smart' meter. By being able to have these meters automatically shut off appliances it will lower demand and help prevent pollution. Since people can control how often and how long their appliances run throughout the day, they will also be able to lower their electricity bills and save money. Even though a 'smart' meter is about three times more expensive as a regular meter, I think all of these benefits are worth it. Consumers will be saving money in the long run.