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funds for its construction in return for access rights to the network after completion, a

model that could be emulated in a deregulated electricity industry.22

All such projects shed new and unflattering light on the unnecessary anti-market

requirement accompanying FERC's wholesale open-access rule (Order 888, May 10,

1996). The order contains an "expansion obligation, under which a transmission company

must expand its capacity, if necessary, to customers willing to pay their share of expansion

costs."23 According to the Energy Information Administration, "10,126.8 line miles of

transmission additions are planned for the United States, Canada, and the northern portion

of Baja California, Mexico, for 1995 through

2004."24 But there is no reason that such expansion must be government directed or that

only regulated firms should have access to customers.

Some analysts argue that the physics of electricity make the grid ill suited for

multiple ownership and that it must therefore be tightly regulated.25 Arthur Fuldner of the

Energy Information Administration notes,

The total generation at any moment must be kept equal to total

electricity consumption and losses on the system including transmission and

distribution.

The electricity is allowed to flow through the transmission system

in accordance with physical laws and cannot be directed to flow through

specific lines.

The system must be designed with reserve capacity in generation

and transmission to allow for uninterrupted service when contingencies oc-

cur.26