Its the deregulation model
Electricity prices in Caifornia are now "Time of Use" which means that we can end up paying 38c a KWh for "peak" -- 4pm to 9pm -- usage, depending on the supplier.
Its no coincidence that around 2000 our then Republican state government deregulated our electricity industry. The model was introduced from the UK where the system had been taken private, then intention being to then spread it to other states. The result here was an unmitigated disaster, not because the power system couldn't cope but because system was set up to benefit financial engineers rather than the public. The most notorious effects were the brown-outs and rotating blackouts caused by shortages that were deliberately engineered to push spot prices higher. This was hidden from the public by a firewall of commercial and legal secrecy which -- unfortunately for the ISO, Enron et al -- had a small hole in it in the form of the Los Angeles Department of Water and Power. This remained independent and the then leader blew the whistle about how they couldn't sell their surplus power to needy customers because they were legally required to put it through the ISO bidding process. (So much for the "free market".) The result, apart from a dramatic rise in power prices, was the state government was forced to intervene, stabilize the market (at significant cost to consumers) and generally sort things out. It also set the stage for the state becoming reliably Democratic -- the whole power thing was an almighty con perpetrated by boosters.
The UK has Ofgen rather than our PUC but it seems to be an agency deliberately designed to be toothless. The result is the UK's got a hit and miss power system with a lot of fly by night retail operators all trying to play the market and apparently getting caught because they're selling long and buying short. There's lots of money being made so efficiency doesn't come into it (where else in the world would a supposedly first world country use diesel electric generators to fill in for demand?). The solution to supply costs is political; we can at least mitigate the problem with abundant solar (but even then the lobbyists are gunning for it -- its eating into profits so needs to be made uneconomic). As a rule, every time something's been privatized with glowing promises of lower costs and better service it has invariably resulted after the honeymoon period in higher costs and lousy service -- it figures if you think about how business works.
Biting the hand that feeds IT
