Some of these issues are created by the bulk power system model. For example, heavy industry and long distance transmission require much more precise balancing

Some of these issues are created by the bulk power system model. For example, heavy industry and long distance transmission require much more precise balancing than neighborhoods. Others can be financed in the same way that HOAs finance capital improvements, or the same way tenants of an apartment benefit from the use of a building and maintenance crew they could never afford to build or have on retainer individually. Others would be obvious how to resolve in practice (ie, How do you prevent your neighbor from wrecking the system? Well, how do you currently prevent your neighbor from hooking up his pipes to the neighborhood fire hydrant? A combination of common sense regulations and social mores.) If our default position were microgrids, we might wonder of a unified system, "but how would you prevent cascading blackouts?" The current answer is you don't, major cascades just happen around once a decade. It's all a series of tradeoffs, and I agree with you, usually the tradeoffs favor bulk generation. The balance shifts when monopolies abuse the public trust. So here, things like load balancing are an interesting example, since that's not an area where HECO has always excelled. UCSD is using a microgrid because they can't achieve sufficient reliability from California's bulk power system: http://www.bloomberg.com/news/2013-10-17/ebay-to-ellison-embrace-microgrids-in-threat-to-utilities.html http://www.bloomberg.com/news/2013-10-17/ebay-to-ellison-emb...