Folk Theorems on Transmission Access: Proofs and

19 a very stringent regulation. Thus, the ecient equilibrium|the economic dispatch|is realized in a way that resembles how centralized economies were expected to realize ecient allocations. The diculties with this centralized approach, in terms of information collection and incentive incompatibilities, have yet to be addressed in the specic context of transmission access. Most proposals on transmission access have been focussed on short term eciency and the problems of transition from the current organization of regulated utilities to a regime of open access. While these short and medium term considerations are important, they should not form the basis for the design of the institutions that will implement open access transmission. The success of open access will be far more dependent on how those institutions will shape the longer term outcomes: how much innovation and investment are encouraged, how easy is it for new agents to overcome entry barriers, how new commodity packages will be introduced, etc. We expect to return to a mathematical formulation of these issues.