If you’ve wondered why your electric bill keeps soaring even when you cut back at home, the answer lies not in your thermostat but in how America’s power grid is run. Former Wisconsin state senator Frank Lasee warns that a broken “take-and-pay” system is quietly driving costs through the roof while leaving the nation more vulnerable to blackouts.
At the heart of the problem are massive grid operators like PJM in the East and MISO in the Midwest. They decide which plants—coal, gas, nuclear, wind, or solar—deliver power. But instead of paying each generator what they bid, they use a bizarre setup called “pay-as-clear” or “take-and-pay.” It works like this: every plant that’s picked gets paid the highest accepted bid, even if most of them offered to sell power for much less.
The result? Outrageous overpayment, especially when “peaker plants”—backup facilities that only run during crunch times—demand sky-high prices. Thanks to wind and solar flooding the grid with cheap bids, reliable baseload plants are pushed out, forced to sell less power, and then raise their prices to stay afloat.
The numbers are staggering. In 2024, PJM’s costs exploded tenfold—from $28.92 per megawatt-day to $269.92, totaling nearly $15 billion. The culprits: new demand from data centers, an influx of part-time renewables, and the premature closure of coal and gas plants under green mandates.
Supporters of wind and solar like to claim they’re saving the planet, but the math doesn’t hold up. Wind turbines only produce power about 32% of the time, and solar just 20%. When the sun sets or the wind dies, guess what fills the gap? Coal and gas plants—the same ones Democrats want to shut down. On top of that, the turbines and panels themselves are built in Chinese factories powered by coal, shipped on diesel freighters, and propped up by massive taxpayer subsidies.
Other countries offer a warning. Germany, Denmark, and the U.K.—all heavy on wind and solar—now pay more than double America’s average electricity rates. And U.S. households are already on the same path.
Lasee argues there’s a simple fix: switch to a pay-as-bid system. In that setup, every generator gets paid exactly what it offered, not the inflated “highest bidder” price. Think of it as paying each painter what they quoted instead of giving them all the top rate. Analysts say such a move could save Americans hundreds of billions of dollars while keeping reliable plants online.
Critics warn some companies might try to game the system by bidding high, but competition—and common-sense regulation—would keep that in check. Right now, the grid is tilted in favor of subsidized renewables that can’t be counted on when the nation needs power most.
Germany’s sky-high rates, rolling blackouts in California, and rising bills across the U.S. are all flashing warning lights. The “take-and-pay” system isn’t just unfair—it’s unsustainable. Unless grid managers and federal regulators act, American families will keep paying more while getting less reliable service.
A pay-as-bid system would restore balance, reward real competition, and put consumers—not the green lobby—first. After all, electricity should power our homes, not drain our wallets.
