[slavik81]

Is this actually how electricity bills work? Mine has always been included in my rent, but I don't see anything like that on the sample bill for my local utility. Nor does that pricing scheme make any sense to me. Why would the utility charge you more for your second 1000kWh than for your first?

> (grandparent) I don't understand why the telcos think massively penalizing people for going over is a useful pricing model.

It makes no sense to me, either. It's like they don't actually want to sell more bandwidth.

Maybe demanding big penalties from people who accidentally go over is more profitable than actually selling to people who actually want more bandwidth.

[jarek]

British Columbia, where hydroelectricity is cheap and plentiful, has a two-tier structure like that. The cut-off isn't exactly 1000 kWh, of course.

The logic is that the utility company plans for generating a "usual" baseline amount, and peaks and use beyond anticipated "norm" are more expensive since you have to spin up/buy additional capacity. In B.C. at least the tiers are set up so that the first category will cover most "average" use.

Also in many places electricity prices are government-regulated to a greater or smaller extent, and a government might structure pricing like that to try to reduce overall energy use or subsidize the lowest users who might be presumed to be poorest.