Do wholesale price caps mean that utility bills will be lower?
No. When California lowered its wholesale price caps a number of times this summer, average costs that consumers ultimately paid went up. Overall, price caps mask the real cost of electricity and undermine efforts to put conservation programs in place. In addition, the price caps have provided a perverse incentive for utilities to purchase power at the very last minute and that has caused serious reliability problems for system operators because they were forced to secure as much as 30 percent of the power need at the very last minute at higher prices.
