[byoung2]

The price of the spot instances will never exceed that of the on-demand rate, since no-one would bid greater than a fixed rate for the same service

Checking the price history in the AWS console reveals that the prices for spot instances occasionally exceed the on-demand rate. In particular t1.micro instances reached $0.05/hr (vs the on-demand $0.02/hr). One possible explanation is that spot instances are more valuable because you can run more of them at a time than on-demand instances (100 total vs 20 total) without having to get an exemption for your use case. Another possible explanation is that people bid higher amounts to guarantee that their instances will run uninterrupted, knowing that even if the price briefly exceeds the on-demand price, the average should still be lower overall.