Earlier quoted context omitted.
This is in fact how regulated utilities work for fixed rate customers (simplified). The utility charges a customer a rate of x for some period. If the cost during that period is below x the utility may have to lower the price in the next period. If the cost is greater than x they may be able to raise the price in the next period. The exact mechanism for cost-recovery is state-specific and subject to a lot of consider…
It denies economics because it does not shape demand during the day due to price signalling.
Most goods and services don’t fluctuate minute to minute despite input prices varying minute to minute. If I go to a car dealer the price of the car doesn’t change while I am there even when the real time price of commodity inputs are moving that quickly. Is that denying economics?