[wavegeek]

I don't know much about the situation in Texas but where I live (Australia) the typical situation - it differs from one state to another - is that you have a semi-deregulated market but with ceilings on rates "to avoid price gouging".

This means that it is basically illegal to provide a capacity for backup power that is only used intermittently. This is because the backup power needs to be priced high to justify having it sitting there all year doing mostly nothing.

Having banned a market solution, governments then stepped in to overcome the "market failure" by running and funding their own backup power supplies.

Source a friend who trades electricity for a living.

[hippich]

Texas also had it capped, just at "gouging" levels - $9/kW when regular price is about $.1/kW or so.