To the extent that duopoly and collusion might prevent the competitive result here, the existing antitrust agencies have authority to intervene. Alternatively, we would propose that FERC impose rules that recognize the exact nature of electricity transmission. That is, cost is not distance related. Moreover, since the marginal cost of transmission of electricity is essentially zero, the prices paid for access to the transmission grid should be lump sum and not unit based. Access fees are superior to unit based fees for transmission and distribution as they do not distort the real cost of producing and delivering electricity.
Most observers see the transmission system continuing to be regulated in some form or another.
One approach is for transmission facilities to be separated from generation facilities and transmission to continue to face rate regulation. They would paid based on their historical costs times an allowed rate of return. An obvious improvement on this would be to compensate them on the basis of true economic, replacement cost. Another approach is for an independent system operator to be created for each unified electricity grid region. The idea is that this agency is franchised out by a competitive-bid based process.