[brandmeyer]

> I suspect you could get 99% of the effect by only passing a small price window to consumers.

I've been thinking about this problem for some years now, since I first became involved in microgrid controls. Rather than change the dynamics by limiting amplitude, I would change the dynamics by adjusting information latency.

Schedule customer pricing based on the day-ahead market clearing price instead of the spot price. End-customers are still exposed to price fluctuations for both good and ill. But now they can make decisions based on them well in advance. Momentary interruptions in communication no longer render the customer blind to the market price. Similarly, low-latency communications are not required for smart devices to take advantage of price changes. The most volatile portion of the market risk is also still borne by the utility.

[mattuk89]

I'm on the "Agile Octopus" tariff in the UK and this is broadly how it works - the next days prices are available around 4pm the day before, giving you time to plan. There is also a cap of 35p/kWh (the standard fixed rate tariff is 15p/kWh for comparison) which limits the downside risk somewhat. In peak hours during the winter it regularly hits the cap. Bit of a halfway house between pure time of use and fixed tariffs.