Market-Based Rates

Market-based rates are prices for goods or services set primarily by supply and demand in the marketplace, rather than by regulatory bodies. In electricity markets, these rates fluctuate based on factors like fuel costs, capacity, and consumer demand, reflecting the true cost of producing and delivering power at any given time. This approach encourages efficiency and helps ensure resources are allocated where they are most needed. Essentially, market-based rates allow prices to respond dynamically to changes in the market environment, giving consumers and providers clear signals about supply and demand conditions.