Democratizing Demand and Diversifying Supply: Legal and Economic Principles for the Microgrid Era

Microgrid policy, if carried out cost-effectively, offers two distinct benefits: democratization of demand, allowing consumers to custom-design their own services; and diversity of suppliers, allowing consumers to choose providers based on their merits. Whether these benefits emerge will depend on how well state legislatures and commissions resolve questions about market structure, customer responsibility and utility compensation. This article identifies the main questions, along with the legal and economic principles necessary to answer those questions.