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Not if they can just charge the customer extra. Where's their incentive?



Charging the customer extra when there's not enough supply is inefficient and leaves money on the table. They just end up selling less electricity. In fact, they're depending on it to stop their grid from crashing. In general, raising prices in response to demand spikes is always worse than just increasing supply to meet it (assuming you can) because of demand elasticity. Having the customers all buy batteries fixes that, but in practice I don't see how it can be very efficient to have your customers tackle your supply problem one-by-one. It would make more sense to just charge some sort of premium to exempt them from high-demand-time surcharges. Would cover the battery cost and prevent the market distortion.

Look at it from the top down: would electrical companies rather be able to meet the full demand for electricity or not? Clearly, they would. Otherwise, why make electricity at all?

I'm not an economist, so I'd be happy for someone to take that apart. One objection is that this charge-more scheme allows the power company to price discriminate against customers who are less price sensitive (like hotels, who just need AC), but...well, I need to be convinced.




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