The political economy of grid-connected distributed power generation systems in California

For nearly two decades, distributed generation (DG) has been touted as a disruptive technology that could revolutionize the way electricity is produced and delivered. Whether this vision will be realized depends upon how this new technology, the existing technological system, i.e., the electric power grid, and the regulatory structure governing these systems co-evolve. My dissertation examines the interface between distributed generation and the electric power grid in California. Drawing upon published materials and interviews with members of the electric utility industry, I analyze technical, economic, and property rights conflicts between the two technological systems that together constitute what I hereby call the problem of interconnection. In attempting to understand the problem of interconnection, I seek answers to the following questions: (1) How and why are key decisions regarding interconnections made in California? (2) How do existing institutions adapt to the changing environment of more DG utilization? (3) To what extent are the DG-grid interactions shaped by technical, economic, and political factors?; It is found that the California approach toward DG-grid interconnection is only one among many possible approaches and not necessarily the most technically or economically efficient. DG is integrated such that it becomes a passive extension to the centralized, hierarchical grid. This technical approach has been standardized while excluding possibilities that had historically seemed possible.; The dissertation then poses the problem of interconnection in the context of evolving property rights to the U.S. power grid. California's distribution sector has been exposed to the same kinds of pressures that have diluted and diffused utilities' rights to generation and transmission control. But unlike the latter two sectors, the institutional recognition of distribution monopolies is still dominant. As a result, local distribution monopolies have been able to exert selective pressures on distributed generation technology through interconnection rules. A comparative analysis of different interconnection approaches shows that, in other countries and regions. DG has already triggered reforms in the institution governing electricity distribution services. The dissertation concludes by offering frameworks for the potential evolution of the technical and organizational aspects of the California grid based on recent technological developments and legal precedents, which show a progression toward a more diluted and diffuse property rights structure.