> On the one hand, you suggest that billing should be based on peak power, because it is supposedly better for the customer to run their own battery, but then it would also be OK for the power company to offer bursting with billing based on peak 5 minute average power, which essentially means that the power company is selling you use of their battery. But then, if they are selling you use of their battery, why only for 5 minutes? What is wrong with them selling use of their battery for all your storage needs? In particular when the power company often has options at their disposal that are far cheaper than actual batteries to achieve the same goal, such as simple averaging over a large number of customers, or moving loads that aren't time critical to otherwise low-load times, which don't need any actual storage at all.

It's two different use cases. It's confusing that we keep talking about the same load, so let's change that.

On the one hand, you have an electric oven. It uses 30 amps, but only while it's heating, which it only does for 30 seconds out of every 90 even when it's in use. So the average is 10 amps. The power company sells you 10 amp service, your average over a few minutes is indeed 10 amps and the power company can average this out with other customers with similar loads, so you don't need to pay more for 30 amp service even though you're periodically using 30 amps for a few seconds at a time.

On the other hand, you have a data center. The servers use 30 amps at all times. It has a UPS, so you've already paid for an inverter, and now you buy twice as many batteries as you would have. Then you order 5 amp peak and 40 amp off-peak service, which is much cheaper than 30 amp all the time service, and run the datacenter on the batteries during peak usage hours. The power company couldn't have averaged this over other customers because the average customer wants to use more at peak hours than off peak, by definition.

And the method by which they get loads to move to other times is by not limiting usage at other times at all, which is what's happening here -- when you order 5 amp service you get 5 amps during peak hours, but during off peak hours you can use however much you like, including to charge your batteries to reduce the peak consumption rate you'd otherwise need to buy.

> While it is obviously true that if everyone had a flat load curve, global utilization would be maximized, you seem to be simply ignoring the fact that there are some real-world requirements behind peoples' load curves, so the actual power or bandwidth consumption of each individual can not be flattened.

"Making the curve flatter is more efficient" is true even if you don't ever actually completely flatten it. If people use a total of 500GWh during peak hours and 200GWh during off peak hours, and you can get that to 450GWh and 300GWh, you've reduced the required generation capacity by more than 10%.

There are a lot of pricing structures that can achieve this. A lot of them are really just the same thing using different terms. One of the better ones is to price based on "maximum average consumption rate during peak hours", i.e. the most of the resource you're entitled to use over a few minute period during peak hours. What you're going to need to A/C your place during peak hours on the hottest day of the year. Because that's how much capacity they need to build, and then have all the rest of the time too.

But the single thing that all of the good pricing strategies will have in common when there is no marginal cost and you're just amortizing the fixed cost of building capacity is that off peak usage is unmetered. Which is specifically the thing that "GB per month" caps get completely wrong.