The Energy Prosumer

Abstract

Decentralization is becoming a dominant trend in many industries, and the electricity industry is no exception. Increasing numbers of energy consumers generate their own electricity and/or provide essential grid services such as storage, efficiency and demand response. This article offers a positive account of the emergence of these new energy actors, which it calls “prosumers.” It then frames several doctrinal and procedural puzzles that prosumers create, including jurisdictional puzzles, distributional concerns, and democratic challenges. Ultimately, it concludes, prosumers can be a positive disruptive force in the electricity industry if courts and regulators can manage these challenges effectively. The article suggests that increased prosumption not only helps further traditional energy law goals but is consistent with a modernized canon of energy law norms including environmental protection and market competition. The article concludes by outlining regulatory pathways to a prosumer future, emphasizing the policy experimentation currently taking place and suggesting conditions for and core elements of a more centralized, synoptic regulatory strategy.

Keywords: energy, distributed generation, demand response