Case Study Details - Future of Power Systems - Local energy ownership and control model

A local energy ownership and control model expands traditional “community power” from a financing concept into a coordinated operating model. Historically, local ownership often meant cooperative shares in a wind or solar project, while day-to-day grid decisions, pricing signals and reliability management remained centralized.

In this model, communities combine shared ownership with structured operational control across a portfolio of distributed energy resources – including solar generation, battery storage, controllable demand, and, where feasible, microgrids. These assets are coordinated using real-time data, interval metering and a defined governance structure. Communities can contract specialized services they do not run themselves (such as dispatch optimization, scheduling or market interface) while retaining visibility, oversight and the ability to expand local assets when they provide lower cost or higher resilience than external supply.

The model is gaining attention because it aligns decarbonization with affordability, local economic participation, and improved operational visibility at the distribution-system level.

Main outcomes of the solution

Local Control: Enables the community to take advantage of local development opportunities to expand its local generation and storage portfolio (e.g. solar, batteries, microgrids, and building a new green hydrogen plant) and decide, as a community, how to manage risks related to energy security and resiliency.
Affordability: Lowers system operating and capital costs by prioritizing least-cost local resources such as distributed generation, storage, and demand management. Local portfolios can reduce peak procurement and congestion-related costs, improve asset utilization, and in some cases defer distribution network upgrades through targeted local capacity and flexibility.
Reliability & Flexibility: Improves supply stability by coordinating distributed energy resources as an operational portfolio using forecasting, scheduling, and automated response. Batteries, and inverter-based control systems, and digital command center are used to smooth net-load variability from renewable generation, extend the solar shoulder, and provide local voltage and frequency support.
System Resilience: Strengthens the ability to withstand and recover from disruptions by enabling islandable operation where microgrids are deployed, supporting prioritized service to critical loads, and providing distributed backup capacity. Digital monitoring and smart meters with auditable operational data can also support emergency response coordination and faster restoration.
Socioeconomic Impact: Supports local economic participation by enabling community ownership of energy assets, creating local revenue streams, strengthening community engagement in energy planning, and supporting local job creation related to distributed energy deployment and operation.

Key deployment and scaling factors

Flexibility to expand over time. Leverage technical partnerships but maintain control over then activity scope (conscious decision of what it the energy community wants to do itself or contract out). Use time-bound pilots and amendable contracts with defined performance checkpoints to de-risk early deployment and create a structured pathway for expanding assets and services.
Configure asset portfolio for lowest cost. Front-of-meter solar and battery is a more economic model that benefits the whole community. Residential solar and battery can complement, but should be sized optimally. There can also be other asset configurations (e.g. agrivoltics) that complement the portfolio.
Recognize the value on the extra time and control. During times of system stress (e.g. extreme cold, fires), it’s the local community leadership that has to coordinate first responders, water, communications, and electricity. Locally produced and controlled electricity can provide an extra 6-8 hours to make important, life-saving, decisions that are also more cost effective in the long-run.
Build resource planning capability and access technical skills. Even if third parties are used for resource planning, the plan should reflect the energy community’s strategy and investments. Build or procure technical capabilities for interconnection studies, grid-code compliance, operating limits, and electricity-market participation to prevent delays and artificial constraints on portfolio growth.
Communications, data, and technology. Whether its through a partner or developed in-house, the communications infrastructure is critical requirement. Deploy interval or real-time metering, telemetry, and control systems so distributed assets can be forecast, dispatched, export-limited where necessary, and settled reliably.
Stakeholder engagement and focus on benefits. Establish a community governance entity, that engages and represents the diverse views of the energy community, with explicit decision rights and specialist operational services. Be transparent about the benefits of investments to different stakeholder groups.

Case Study

Kit Carson Electric Cooperative (KCEC) and Guzman Energy (2016), USA

Kit Carson Electric Cooperative (KCEC) is a rural cooperative in northern New Mexico serving roughly 31,000 members. In 2016, KCEC implemented an energy community model by transitioning from limited self-generation toward greater local ownership and operational oversight of a diversified distributed energy portfolio.

KCEC partnered with Guzman Energy to finance its exit from a long-term wholesale supply contract and to provide market interface services. This arrangement allowed the cooperative to expand direct control over local energy assets including solar generation, battery storage, microgrids, and now a green hydrogen plant (under construction) across its service territory.

Key elements include utility-scale front-of-meter solar projects designed to benefit all cooperative members, operational use of battery storage to manage export limits and reduce transmission charges, and islandable microgrids designed to maintain critical services during severe weather or grid disruptions.

Reported outcomes include achieving “100% daytime solar” beginning in 2022, maintaining relatively stable residential electricity prices since 2016, and expanding the local portfolio from approximately 2.5 MW of solar capacity in 2015 to around 100 MW of solar, storage, microgrids, and hydrogen plant operating or under development. The cooperative reports annual electricity supply that is typically around 70–80% renewable.

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