Peaks like this (or up to 5x higher) occur in Texas. It's part of a competitive grid, and is an incentive for providers to have capacity to deal with rare peak

Peaks like this (or up to 5x higher) occur in Texas. It's part of a competitive grid, and is an incentive for providers to have capacity to deal with rare peaks of demand/supply imbalance. What matters to consumers is what they end up paying integrated over time. A grid with lower peaks, but higher average costs, would be worse for consumers. Such bursty price structures provide incentive for demand dispatch. This is a real use case for IoT and smart home technologies, allowing demand to respond to changes in price.