Please Blame the Deregulation and Regulation Fiascos Parte 41

Gentlemen,

This is comment number 100 or more...

I want to understand the markets aspects of Len's proposal, not the details of the implementation. I don't understand his insistence on a pure market standpoint, I am beginning to see an important difference between his mental model and Hogan's and the extended Schweppe's mental models. If that is the case, Len's mental model is a third competing market based on short run coordination. We need to know how everybody wins in such a market, in which is not clear how system long run coordination is arrived at.

I like to learn how Len's mental model ensures long run adequacy and market power mitigation, without any regulation? In the extended Schweppe's mental model T&D remain under regulation and take on the role of system planner and operator to ensure long run adequacy and mitigate T&D congestion. Long run plans will indicate the locations where generators will be needed in the future. Retails and generators participate in the planning procedures.

Electricity WPC value chain allows generators to be installed in select locations by making a long term decision. Generator competition is more a long run decision than a short decision. That is how adequacy is developed in time and space.

Long run expected price values allow retailers to design their portfolios with demand side and supply side solutions. Retailers enter in long run contracts with generators and customers to participate in the wholesale market - competing with other retailers - to ensure long run adequacy for their customers, while mitigating market power.

It does not matter that anybody opposes Electricity WPC. What matters is that sufficient people like it so that it crosses the chasm. Hogan's mental model crossed the chasm, but it is having trouble everywhere on earth.

Comparisons with other industries should be look at in greater detail. I know that bank transactions are under prudential regulation including a clearinghouse system. Airline traveling is under traffic control. Electricity needs to have also a traffic controller to insure that there are not crashes and to allow a business as usual environment in the wholesale, retail, customer value chain. I think your model is wholesale customer value chain, and as such there is no retail competition. Please advise!