After days without power, lower Manhattan began to get downright medieval. Because so many New York buildings depend on electric water pumps, the lack of running water created a distinctly primitive feeling—and smell. The human and economic cost has been serious—lost economic activity is estimated at $20 billion—and some unlucky residents in New York’s outer boroughs won’t have power for weeks.

It doesn’t have to be this way. Blackouts are a problem that can be solved. Given that hurricanes have doubled in frequency over the last century, they need to be solved. There are an awful lot of obstacles, but given that America tends to act in response to crisis, it is a good time to seriously reconsider the basic design of the electric system.

For some time now, it has been obvious that the highly-centralized design of the electric grid is fundamentally flawed—remember, for instance, New York's massive blackout in 2003. In the current design, power is generated at a relatively small number of massive plants, like the nuclear reactors at Indian Point, and then transmitted long distances to substations, which step down and distribute the power for home use.

When the system works, it works fine, albeit in a wasteful and polluting way. But, like most large centralized systems, it has many individual points of failure. Consequently, when it fails, it fails big. Right now we’re seeing exactly what a big and expensive failure looks like. 

There's a better system. It goes by various names, including “microgrid” and “distributed generating.” The basic idea is to make the electric network more like the Internet. If well implemented, a better topology would make power failures less likely, and shorter when they happen. The key is to decentralize: to turn a regional electric network into a network of smaller, neighborhood networks, that no single points of failure, so no one substation can take down half a million homes.

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Under our current system, lower Manhattan goes dark when the 14th St. substation blows up, until ConEd can rebuild it (and, yes, the company’s efforts to do so have been heroic). In a better system, the 14th St. substation would be only one source of electricity for lower Manhattan. The basic topology of the network would be different in several ways. The simplest is that buildings and neighborhoods would be encouraged, not discouraged as they are now, to generate their own power, (either independently, as part of a heating or AC system, or by using solar or small wind generators). Buildings would be able to easily sell that power within their neighborhood (on their microgrid). 

In lower Manhattan, for instance, an apartment building could take power from multiple sources: its own heating system, the local hospital’s generator, solar panels on a nearby office, while still relying on ConEd as a supplement and backup. Over time, homes would come to depend primarily on many different local sources of power, as opposed to the large power plants. In the event of a failure that knocked out a local wiring or power, the network would be able to heal itself, by taking power through different routes to reach powerless homes.

These ideas are borrowed from the Internet’s design. A popular legend, that also happens to be true, is that the Internet was designed to withstand nuclear attack. Paul Baran, a computer scientist at RAND in the 1960s, did come up with essential Internet features while trying to design a communications network that, in his words, that would allow “the survivors of the holocaust to shuck their ashes and reconstruct the economy.” Baran took the Internet’s design from the human brain, which can recover from damage by mapping functions to new neural paths.

In the 1960s many people thought Baran’s ideas were pie in the sky, especially the regulated monopoly, AT&T, which described the central ideas of the Internet as “preposterous.” Today, the transformation of electric networks faces similar resistance, despite the obvious benefits. These benefits are not just practical, but also economic: A decentralized electric grid would open the electric business to entrepreneurs and small businesses, and could spark an innovation revolution similar to that seen in the 1980s when computing moved from central mainframes to personal computers. It is hard to predict the business models that might emerge, but that’s what makes it exciting.

The problem is that getting from here to there is incredibly daunting. While there are technical challenges in the integration and storage of multiple sources of power, they are not insurmountable. A 2007 Department of Energy study pointed to advances that have made distributed generation plausible, including “photovoltaic panels, microturbines, reciprocating engines, thermally-activated devices, fuel cells, digital controls, and remote monitoring equipment, among other components and technologies.” Indeed, as that study pointed out, some of the basics are in place: there are, in fact, already 12 million independent generating units in the United States, mainly operating as backups. The main challenge, the Department of Energy stressed, is that existing utilities seem to want no part of the new system.

Inertia is the main problem.  At some level, the existing power companies, mostly former or current regulated monopolists, control the system and they have no real incentive to want anything other than incremental change. Like the AT&T monopoly in the 1960s, the utility industry resists “independent” generation at all costs except as an emergency backup, and it typically charges various fees for “interconnection” or “standby” that make relying on local power financially implausible. It is true that moving to a different kind of network would cut into the utilities' revenue.

There have been movements to reform the American electric network before, but unfortunately, the electricity deregulation movement of the 1990s, rather than produce real architectural or technological revolution, simply generated profit opportunities and sometimes even further centralization. Despite occasional prodding by Congress and the states, the movement to decentralize energy networks needs a real push, or we’ll continue to have crippling power outages both after disasters and when trees fall on power lines.

It takes long term political leadership to try and reform the electric networks.  So far, it has been states in the West that have gone the furthest: Colorado, in 2010, passed a bill requiring that 3 percent of the State’s power be generated by decentralized sources. If ever there was a time for the East to try to catch up, that would be now.