Transforming transmission companies into market-based regulated businesses

This paper proposes a new way of combining regulatory oversight with market-based incentives for transforming the transmission companies into a business which will provide public benefit solutions for the transmission investment problem, especially where a transmission project crosses multiple governmental boundaries. The proposed regulatory structure seeks a balance between the traditional regulated and vertical utility structure and the typical power market designs which have viewed the transmission grid as a monopoly requiring regulation and open access. A new area of research is proposed. It is to investigate a new economic system, a third way, which overcomes the deficiencies of capitalism/free market and socialism/central planning. This concept is called Unity in Diversity-ism or UDI-ism. An example of a long distance transmission project and transmission toll collection is used to illustrate the concept.