The wholesale price of electricity fluctuates wildly during the day due to the peaks and troughs.
Examples (in my state only), see a general trend of around 2.0 to 7.0c/KwHr on a normal sort of day, however, in summer peaks, that can rise to $12.00 per kWhr, and overnight troughs on mild autumn days the generator may have to pay $1.00 per kWHr to keep their plant in the game ($100,000 diesel to restart a big coal unit, so paying to produce at min load can be worth it).
The retailers are fixed at around 20c/kWhr 24/7 (yep, they have their introductory rates to attract new customers). With an normal meter, they can obviously only charge a flat rate.
They won approval through our competition lapdog watchdog to introduce variable "passthrough" pricing of peaks with smart meters. Initially, they tried to stop the technology from including read-outs to allow the consumer to know what they were being charged, and modify their behaviour on the fly...once they were told that this was a prerequisite by the Govt for variable pricing, they suddenly found out that they were hard to implement, and now years away.