This also resulted in higher prices for San Diego customers. The fact of the matter is that although prices are high, the wholesale markets are working. If they weren't, generators wouldn't operate and there would be statewide blackouts. It is important to note that generation can be bid into the market at a profit or a loss. Both happened during this period.
Low bids are common during early morning hours and more frequent in the spring and fall.
Often, these result in wholesale energy prices of zero. These losses need to be offset with profits during the summer. As a result, it isn't obvious that participants in California's markets are making excessive profits on an annual basis. Moreover, profits need to be high enough to stimulate construction of new generation, as the long-term solution to the present problem is more generation. Fortunately, prices have been high enough to stimulate new power plant construction and new plants are expected to come on-line in the next 18 months.