>charge for every kWh above that.

This is a little bit how it was in Texas in the 1970's and early '80's, when the utilities were still a tightly regulated monopoly.

There was no free energy, but prices could only be changed by a lengthy bureaucratic process. However HL&P had become familiar and had the upper hand in negotiations, but at least the Public Utility Commission still represented the public back then.

In order to be allowed an exorbitant overall increase, they "agreed" to much lower residential rates than business rates, and then deeply discounted the first few hundred kWh for residential customers. They could negotiate the number of baseline kWh as well as the (multiple) rates themselves.

That way once the rate increase went into effect, the largest number of the least financially capable customers would have the most tolerable increases, but the overall monthly cost really shot up quick once you started to cool the whole house with A/C.

This scheme lasted until deregulation and even beyond. There was no requirement to give up your previous monopolistic provider after they migrated to the "free" market, so if you stuck with the traditional HL&P "plan" you still got the baseline kWh way cheaper than anyone else would ever offer, but the remainder kWh over that amount was what was becoming competitively priced.

Even though no other electricity provider had the cheap first kWh's to offer, they were still taking customers away all the time. Regardless, most people had never paid any attention to how cheap it was for the first week or two of every month, and those affordable kWh's were strongly de-emphasized as HL&P came up with all kinds of tempting alternative plans to get you away from the lingering one where the core of everyone's personal energy usage was truly subsidized by those who could most afford it, by one of the last beneficial moves of the PUC.