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You mean they can selectively shut down certain areas/appliances in your house, or cut power to your house completely. Is this done through the smart meter?
Yes, they can and it will be done through the Smart-Meter. In some cases you'll get an opportunity to run the appliance at a significantly higher rate (say $0.24 per KwH instead of the $0.16 you normally pay).
yes it is really a great thing, power companies can manage load that way, I'd go for such a thing if the rate cut was substantial
There is no rate cut involved. If anything there will be another rate INCREASE.