Why doesn't the market decide, if the bitcoin miners got 20,000% rate increases they would stop on their own for free. If the rate goes to zero, they will surely jump in an use as much as their hardware can burn. Why are payments outside of rate changes necessary at all?
Because the grid needs a very large consumer to stop RIGHT NOW and be under contract to do so when told. To get this contract, the grid promises money. There is no guarantee that adjusting the power cost for a customer will make them stop consuming power when it is needed. The contracts are in place to ensure the grid operator KNOWS that they can achieve stability when they need it.
