the electric utility industry is inexorably being forced into a less regulated , more competitive , and more conservation oriented mode of operation . it is therefore inevitable that electric energy will have to increasingly resemble a commodity that is bought and sold on free and competitive markets . this invention describes a system and method to emulate and automate such treatment of electric energy with minimal disruption to the public service oriented utility concept . the system for achieving this is comprised of ; sensors that monitor 1 ) out - of - doors temperatures , 2 ) mean power supplied by each generator in a utility system during each hour and 3 ) energy consumed by each customer per hour recorded in calendar - time ; computers that are programed with software developed from algorithms that are described in the invention ; and a subsystem that feeds back pricing information to consumers . the algorithms continuously generate demand - related hourly prices and bonus / surcharge distributions , while keeping gross revenues fixed . taken together all this facilitates inter - utility competition , minimizes regulation , impels more efficient use of utility assets , and provides economic incentives for conservation .