as a result networks services are provided commercially by single parties and the revenues from these services must be regulated to ensure the provider does not abuse their monopoly position this means that the retail price and end customer pays for electricity does not increase when the wholesale price for electricity is highest even though the cost of that electricity may change substantially the differences in the cost of supply are generally averaged and spread across all users so price signals do not communicate information about the scarcity of electricity at particular times as a result customers are unable to ration supply in response to the value they place on it and will continue to demand electricity even when its underlying cost is at peak levels