Dear God Supertool.
Sorry, you're probably a nice guy, its just that I read your last thread.
FERC is an oversight ISO. They aren't supposed to institute price caps, only gaurantee anti-competitive practices and maintain the integrity of the grid. The current energy marketplace works like this:
You buy power if you need it, and sell it if you have it, several months in advance. Usually about 75% of your antipicated load. the rest is done up in short-term contracts. When supply is adequate, no one is going to withhold production if there means of producing it costs less because powerplants don't make any money if they just. We're talking major capital costs. Anyway, if you have a shortage, its usually in about 5% of your total load because the other 20% has been taken care of in the last two or so weeks. Now this five percent happens every day if there is any deviation from the anticipated load or if someone on the trade floor didn't get enough supply to hit the projected load.
What happened in CA is that there was so little generation because nothing had been built in 10 yrs that no one could follow that plan and instead of 5% not being accounted for until the last minute, you're looking at 25%. That means prices are sky high. There is no economic reason to withhold the little bit of production a company has in its portfolio to drive up prices, because it has an obligation (remember FERC) to supply its customers, and it would only be driving up the price on itself.
This was a simple supply shortage. Blame the beauracrats, blame the environmental wackos (I do), blame the energy companies, but there wasn't enough supply, so prices went up. Price caps will do as you say, reduce the suppliers gross income, but it will also tell people "Hey, there really isn't a butt load of money to be made in CA, so don't build any more powerplants and drive down the cost of electricity"
BTW, to be fair, El Paso Energy was caught withholding supply of natural gas, a feul for the power companies, but they got caught. However, that only ran up fuel prices, that didn't affect the shortage in generating capacity.
Have a great day