Decentralised and centralised energy: a property rights analysis

Interconnection between centralised and decentralised electrical power sources remains a contentious issue on technical, economic, and policy grounds. This paper considers the problem of interconnection as a property rights problem – one that involves allocation conflicts and pressures for institutional change. We argue that the current policy approach to interconnection problems between distributed-generation power sources and the distribution grid in California should take more careful account of changing property rights characteristics of the distribution grid. We review two emerging property rights frameworks – community choice aggregation and public power cooperatives/municipalities, which may help overcome such interconnection barriers.