If the first interpretation is correct then it's rather interesting because this is what the Methodists believe with their two forms of graces. Two graces, two election. Problem solved. Trouble is scripture makes no such distinction. This is manufactured. The burden would be on you to prove to me that there are two forms of election talked about in scripture.
If the second is correct that election is only in reference to elected to grace, then you would have a problem with verses like the following:
or
Isa 65:9 And I will bring forth a seed out of Jacob, and out of Judah one who inherits My mountains; and My elect will inherit it, and My servants will dwell there.
So that leaves you with trying to convince me the scriptures talks about two sets of elections and how you know which election is being talked about.
Under your interpretation, if this was written to those "elected to grace", then Paul would be telling apostates to let the peace of Christ rule in their heart. Obviously this wouldn't make any sense.
Now you see how your interpretation of this verse depends entirely on 'sola scriptura', i.e. the notion that the Bible alone is the ultimate authority, and is perspicuous and self-interpreting to all. You don't find a distinction between "election to glory" and "election to grace" in Scripture, therefore such a distinction does not exist.
I would say an apostate (probably several) have read this verse and probably used it on a number of occasions. So?
Because if apostates-to-be have thought that this verse applied to them, then just because you think this verse applies to you does not show that you are not an apostate-to-be. In other words, the verse can't show you that you are elect for glory if apostates-to-be can also believe that it shows them that they are elect for glory. For then the mere fact that you believe it applies to you is not a sufficient condition for being elect to glory, for apostates-to-be also believe it applies to them.
-A8