Generation and transmission, at least, are auctioned to the lowest bidder through RTOs. Collusion to inflate prices is prohibited. The RTOs are the industry sel

Generation and transmission, at least, are auctioned to the lowest bidder through RTOs. Collusion to inflate prices is prohibited. The RTOs are the industry self-regulating, but post-Enron the industry is under a lot of scrutiny and nobody wants the government to take over regulation. The resource (electricity) is completely fungible, so providers can only compete on price. So at least at the generation/transmission levels, I think competition might actually prevent what you're predicting. It's worth noting that generation occurs in different groups based on how expensive it is to increase or lower output, which is necessary constantly because usage fluctuates cyclically: 1. Hydroelectric is cheapest to scale up and down, so there's incentive to inflate prices and wait for high-usage times, especially when water levels are low. 2. Fossil fuels are mid-price to scale up and down, so there's some incentives for inflating prices, but fuel prices are also a factor. 3. Nuclear is extremely expensive to scale up and down, so there's incentive to try to always be the lowest price. Turning off and on is sometimes more expensive than selling generation at a loss. 4. Wind/solar are cheap to scale up/down, but are weather/time dependent and therefore unpredictable and uncontrollable to an extent. You can scale down cheaply by dumping energy into the ground, but you may not be able to scale up at any cost. It should be clear from this how important hydroelectric is to our power system's pricing. Nuclear/wind/solar often result in the most competitive generation costs, but if hydroelectric goes up in cost, nuclear would have to scale generation up and down more often at great cost. When wind/sun are good, there's competition for flexibility, but when they aren't, hydroelectric controls the price of adjusting generation. So I think that if companies adjust their numbers up to maintain profits, it will mostly be hydroelectric generation. I don't understand the effects of wind/solar on the market as well, because they weren't as large a sector when I worked at an RTO. However, I am under the impression that efficient energy storage would have a large impact on allowing wind/solar to compete with hydroelectric on ability to scale up/down. And this is urgent, because the inflated cost of hydroelectric's scaling is capped at the cost of fossil-fuel scaling, which is only going up in price in the long run.