PG&E only runs the grid(s), not generation

The government can structure a public market in many different ways (they do this in many aspects of the economy). It’s not limited to real time auction vs single provider.

Incorrect. They do have generation but it’s not a majority producer. My point being that PGE still is helping set the rate via the CPUC. They are purchasing power through some of the spot markets. They are unable to even manage their own transmission lines effectively though.