Int. J. Global Energy Issues, Vol. 27, No. 3, 2007 323 Copyright © 2007 Inderscience Enterprises Ltd. Decentralised and centralised energy: a property rights analysis Sopitsuda Jiab Tongsopit* and Brent M. Haddad Environmental Studies Department, University of California, 1156 High Street, Santa Cruz, 95064 California, USA E-mail: Jiab@ucsc.edu E-mail: bhaddad@ucsc.edu *Corresponding author Abstract: 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. Keywords: distributed generation; electricity governance; property rights; interconnection, electric distribution system; electricity restructuring; microgrid. Reference to this paper should be made as follows: Tongsopit, S.J. and Haddad, B.M. (2007) ‘Decentralised and centralised energy: a property rights analysis’, Int. J. Global Energy Issues, Vol. 27, No. 3, pp.323–338. Biographical notes: Sopitsuda Jiab Tongsopit is a PhD candidate in the Environmental Studies Department at the University of California, Santa Cruz. Her current research is on the political economy of DG-grid interconnection. Brent M. Haddad, MBA, PhD, is an Associate Professor of Environmental Studies at the University of California, Santa Cruz. He has published on renewable energy, energy efficiency, climate change, environmental markets, and water policy and management. 1 Introduction Rising energy prices, combined with advances in distributed generation, are driving a rapid global deployment of Distributed Generation (DG) technologies, which raises challenges for the governance of the electricity institution. Distributed generation can be defined as small-scale power generation technologies that are located close to where electricity is used. Its typical role is to supplement or replace electricity demand