> One way to do it is insurance. The customer pays premiums so they never have to pay more than e.g. ten times the ordinary price no matter what the true market

> One way to do it is insurance. The customer pays premiums so they never have to pay more than e.g. ten times the ordinary price no matter what the true market price is, or buys from a retailer who charges somewhat more in order to do the same. Sure, that's one way, ultimately all the way to the end user paying a flat fee, which I guess is what a majority of residential customers are in fact doing. But I wonder, if all the producers and consumers are hedged in one way or other against too low/too high prices, why have that wholesale price in the first place if it's just a fantasy number that affects nobody? > Another alternative is to give customers a price threshold at which they don't want electricity. If the price exceeds $2/kWh, just immediately shut off my service. This is in essence what RTO's are doing today, just for the whole region they are serving and not each customer separately. That is, there is a roof price, and instead of the price going over that limit in order to incentivize more generation to come online or customers to reduce demand, there will be rolling blackouts. So in general wrt marginal cost pricing, I was thinking of something along the lines of https://www.researchgate.net/publication/323378820_The_Use_of_Marginal_Energy_Costs_in_the_Design_of_US_Capacity_Markets https://www.researchgate.net/publication/323378820_The_Use_o... This is only going to get worse as more and more generation will be near-zero marginal cost like renewables and nuclear.