So most observers would expect prices at night to return to normal. The resulting price hikes have doubled and even tripled residential bills this summer. The nonprofit agency manages the transmission of electricity for 70 percent of the state. Commissioner Carl Wood of the Public Utilities Commission, the state's top electricity regulatory agency, said Monday that he was looking at the high evening prices as part of a wider investigation into the power markets. The commission will hold hearings on the subject today and Thursday in San Diego.
Temperatures fall and businesses close in the evening, causing demand for electricity to fall.
California's consumption has surpassed 42,000 megawatts during afternoon hours in the last month, causing officials to declare 13 separate power emergencies and ask big users to cut back to avert a statewide blackout. But late at night, consumption generally falls to as low as 20,000 megawatts. Collusion exists in a market when either suppliers or buyers cooperate in order to manipulate prices to their advantage. When the supply of a commodity is tight, sellers tend to become more powerful and demand higher prices. In conditions of abundant supplies, buyers can generally find more suppliers who are desperate to sell at lower prices.