California slants retail prices backwards then what one expects from supply and demand theory. They add other energy regulations and differential pricing that have made the arbitrage game come back. Whatever government favors, in its price control, is satisfied first in the market. government controls Gray Davis did it, the California legislature is always price controlling energy. So I have sales people knocking on my door, wanting me to sign up as a wholesale buyer, that is, I buy through them because my first batch is cheap, then they make up the price competing with the second half of the sales cycle, the side not price fixed.
I call it the cul de sac market, California does it all the time. They enforce quantization, large sales amounts, because of a price/volume guarantee. Then the last part of demand is mame from marginal producers. Analyze this and all other trade channels using the minimum number of transactions optimizer, and you can see how price regulation causes transaction size and transaction rate changes in energy flow.
Here is the fundamental problem, energy is more liquid than government regulation and control.
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