Sepia - A self-organizing electricity pricing system

The demand for electrical power is not constant. There are certain times of the day where the demand levels are much higher than the rest of the day. The demand can often exceed the generation capacity and when that happens, the utility companies can either shed loads or buy additional electrical energy from wholesale electricity markets to close the gap between demand and supply. These markets clear energy at spot prices that fluctuate widely and can be much higher when the demand is high than when the demand is low. When the market rate for electricity rises above the approved retail rate, utilities are caught in the middle, which can be financially disastrous for them. © 2012 IEEE.