Please Blame the Deregulation and Regulation Fiascos Parte 25

Dick Maclay asked for clarifications on the mental models:

Jose Antonio, I would just like to confirm the differences among your mental models, if you would be so kind. This is my understanding of the essence of the models:
The Banks model is traditional cost of service regulation.

The Extended Schweppe model is the open competition with choice for all retail customers. It is whatt most of those commenting in this thread are agreeing is desirable.

The Hogan model confines markets to the wholesale sector, while maintaining regulation for the retail sector of the market.

The Enron model is a variant on the Hogan model in which the ISO and the power exchange are separated. I am a little confused about this one because the industrial customers in California pushed hard for separation of the ISO and power exchange. They wanted to be able to bypass the power exchange in their direct access power purchases, and have the ISO clearly limited to only those activities associated with system reliability. They were concerned that if the ISO ran the power exchange they would get dragged into it, or be adversely influenced by it. So the intent was to achieve something like the Schweppe results. Unfortunately, wires and commodity prices were not properly separated. The wires prices included subsidies of power purchases by the utilities on the assumption there would be stranded costs, plus some confusion by regulators on the proper long-term separation of the two. As a result, power exchange bypass only worked for some very large customers. So is your Enron mental model a variant of the Hogan model, regardless of the unfulfilled hopes of many of its supporters? In that case does it exclude retail customer choice?

If I understand the Hogan model correctly, it does not allow generators to bid high enough to recover all of their capital amortization without periods of tight balance between supply and demand. But without the discipline of retail price elasticity, prices can soar in such periods, so some sort of oversight is soon demanded. But then a capacity market is required to collect the amortization of capital costs not fully collected in the managed spot market. Since capacity is charged to retailers on an average cost basis, I wonder why the money to be recovered in the capacity charge is not given the name ‘rate base’. In the end the Hogan model does not seem much different from the Banks model unless generators avoid the need for a capacity market by merging until they can collect money for plant amortization through monopoly power instead of administered payments. And in that event Ferdinand's concerns have some validity.