Because then, providers would try to guess the highest bid and bid $1 lower. As every bidder would miss once in a while, that loss would be factored in prices,

Because then, providers would try to guess the highest bid and bid $1 lower. As every bidder would miss once in a while, that loss would be factored in prices, and raise prices overall. This bidding system ensures that everyone can publish their lowest bid with no fear of losing out, and by doing so, it maximizes publicly available data so regulators and TSOs have a good idea of what is actually available and which investments are necessary.