The wholesale/spot electricity market is a scary place, as some people in Texas discovered last year [1]
Time of use pricing tranches are designed to insulate consumers from that sort of variability, while also incentivizing consumers to minimize consumption during peak demand times.
Time-of-use electricity pricing has been happening in California for a long time, but only now is it becoming mandatory (there are still many households out there on legacy flat-rate plans, although they are being moved).
Many parts of the country are just now introducing time-of-use pricing. As both the grid and loads become smarter and more resilient, we'll see consumer electricity rates reflect the underlying wholesale price variability even more, but probably never completely.
1. https://www.nytimes.com/2021/02/20/us/texas-storm-electric-b...