Converging Technologies, Diverging Institutions: Bridging Governance for the Grid and the Grid’s Edge

The electricity system is entering a transformative era in which digitalization, distributed energy technologies, advanced power electronics, and real-time data flows are collapsing long-standing physical boundaries across the regional transmission and local distribution layers of the power grid. These technologies create opportunities for coordination across physical layers of the system, from grid-edge devices up through wholesale power markets operated by Regional Transmission Organizations (RTOs) and similar entities. They also expand the feasible space of organizational arrangements, making decentralized and hybrid forms of coordination viable in settings where strict hierarchies once dominated. The power grid has been operated in a highly top-down hierarchical fashion for over a century, while technological innovation holds the potential for much more bottom-up control. These innovations create additional layers of complexity, but in ways that could make the power grid increasingly and beneficially adaptive.

Amidst this potential technological convergence, institutional structures across layers of the grid infrastructure remain deeply divergent. Regulatory frameworks at the distribution level preserve hierarchical, utility-centric models, and RTO governance reflects various forms of polycentricity (while still retaining a high level of top-down control). The two forms of governance have continued to be separated by an institutional bright line which is increasingly irrelevant technologically. Jurisdictional boundaries, legacy legal frameworks, organizational mandates, and procedural requirements reinforce a rigid separation between bulk power and distribution even as the underlying physical system becomes more interconnected and interdependent. Emerging technologies generate pressures for integrated, decentralized coordination, while legacy institutions continue to enforce bright-line separations.

This working group uses complexity science to interrogate this misalignment — how converging physical capabilities collide with institutional divergences—and how institutional change might unlock the system’s emergent and emerging (or emerging, or both!) capacity for decentralized coordination and cross-layer integration.