[FractalLP]

The post above yours is actually correct. I didn't read it as rude either although maybe a little dismissive. If you work in this space, you quickly realize just how complex everything is as the electric grid is the largest most complex machine on planet earth. The legal, economic, regulatory, and engineering aspects of it go pretty deep.

Utilities typically own generation plants as well as the high voltage transmission lines that transport electricity to consumers which then have their voltage lowered (think of a transformer as a device that lowers pressure) before going over smaller distribution lines into your house. Long ago, competition was fierce, so utilities went to the government and asked to be regulated. This caused forced consolidation and they began to effectively serve as monopolies and make a modest return on investment each year. In those days demand was fairly easy to forecast. The utility would make sure they always had enough generation online plus some extra to cover any emergencies like a unit tripping offline. The grid worked like this for decades and costs were fairly cheap. If the utility needed to build a new nuclear plant (example) they would have to go to the state commission and get them to approve raising the rates. Now, although rates were fairly cheap, there was a push to deregulate things. In theory, markets are less efficient in some ways, but more in others such as incentivizing new and more efficient technology. Remember the regulated utility doesn't make any more money by doing research and risking new technology.

With deregulation, we moved to the RTO/ISO model where lots of utilities band together and work with an RTO/ISO. The RTO/ISO chooses which units run via optimization. It wants to find a way to serve all the customers in the region, plus provide backup power, and do it very cheaply. Remember how the utility has to keep extra units online in case one trips? By banding together into what is known as a "pool" you can save lots of money as far fewer units need to be online as backup. The RTO/ISO does this as well. It also knows the cost of each unit and chooses the cheapest ones. This is slowly forcing more costly fossil fuels to retire as they simply aren't as economical. This causes an issue as even though wind/solar is awesome, it isn't as reliable as a massive coal plant with months of fuel waiting to be used. Making sure there are no blackouts is VERY important to grid operators. The industry is scrambling to address these issues as fast as possible, but it is a tough issue. Deregulation is a weird word as utilities are still regulated, but there are now market forces coupled into it as well helping push progress forwards. I hope that helps a bit!