The Chicago Community Energy Cooperative (founded in 2000), in association with ComEd, developed the first significant effort to introduce hourly market-based electricity pricing to residential customers. The four-year pilot Energy-Smart Pricing Plan demonstrated the potential benefits of real-time electricity pricing on a limited basis. It was the first residential, market-based, hourly electricity program in the United States. As a result of its success, this program paved the way for expanding real-time pricing to all household across the state of Illinois, starting in 2007. The goal of the pilot project was to allow both participating customers, and the market as a whole, to capture the benefits of having retail prices of electricity reflect the costs of providing that power to customers, encouraging more-efficient energy consumption, reducing stress on the electric grid, and lowering peak demand for electricity. The pilot project (and expanded access to real-time pricing as of 2007) addressed some of the central issues associated with providing residential customers with electric price signals that reflect the changing costs of providing electricity. While the hourly costs of electricity in wholesale markets can vary dramatically, retail pricing, particularly for residential and small commercial customers, has largely remained subject to regulated tariffs. These tariffs typically have provided customers with fixed rates, i.e., they pay the same price for electricity regardless of when and how much is used. This fixed rate does not reflect the true cost to the economy of consuming electricity at a given point in time, and therefore it distorts key market decisions. As long as consumers have flat rates, there is little incentive to manage what is scarce. With real-time pricing, residential customers still receive a monthly bill that represents an average of electricity costs across that month. However, these customers are now afforded an opportunity to manage their bills and reduce their energy costs by shifting some of their energy use high price periods to lower price periods.The Community Energy Cooperative's (Cooperative) Energy-Smart Pricing Plan (ESPP) was started in January 2003. It provides customers with electricity prices that accurately reflect the hourly market price of electricity, and gives them the opportunity to make informed decisions about electricity use based on these prices. A regression-based model was developed to estimate the electricity consumption of each participant. The results show that participants consumed 35.2 kWh less per month during the summer months under ESPP relative to what their usage was estimated to be had they not received hourly electricity prices. This represents a savings of 3-4% of summer (June through August) electricity usage. (During the winter months, there was no statistically significant difference in monthly energy use between ESPP participants and individuals not facing hourly electricity prices.) Therefore, ESPP results in a net decrease in monthly energy consumption. In addition, ComEd customers under the pilot version of the program saved an average of 10% on their electricity bills, compared to what they would have paid on the standard rate.