A homeowner installs rooftop solar and a battery. An apartment developer adds onsite wastewater treatment and reuse. A business decides it can generate some of its own power or recycle some of its own water. Each choice looks private. But multiplied across a city, those decisions begin to change the behavior of public systems built around the premise that everyone depends on the same pipes, wires and shared capacity.
That is where civil engineering runs into game theory.
Margaret Garcia is an associate professor of civil, environmental and sustainable engineering in the School of Sustainable Engineering and the Built Environment, part of the Ira A. Fulton Schools of Engineering at Arizona State University, who studies infrastructure systems, especially how they are built and how they perform under stress. She has teamed up with Paul Grogan, an expert in game theory and an associate professor of industrial engineering in the School of Computing and Augmented Intelligence, part of the Fulton Schools at ASU. The researchers have received a grant from the U.S. National Science Foundation, or NSF, to answer pressing questions about what happens when public utility infrastructure meets a new generation of private technologies.
“It’s becoming more accessible for individuals and businesses to buy distributed water and energy technologies,” Garcia says. “This can lead to some really good or really not so good outcomes for the public system.”
As part of the three-year NSF-funded project, Garcia and Grogan are studying how utilities and planners can integrate decentralized energy and water technologies without undermining reliability, affordability or access.
When the grid becomes a game
Civil engineering supplies one half of the puzzle. Pipes, wires, treatment plants and substations have capacity limits. They age. They fail. They cost money whether people use them a lot or a little. Water and power systems also behave differently: electricity moves instantly through a grid, while water moves through pipes shaped by pressure, quality and storage constraints.
Game theory supplies the other half. A household deciding whether to install solar panels is not optimizing for the entire grid. A developer considering onsite water reuse is not automatically solving a city’s infrastructure problem. Utilities, households, firms and regulators all make decisions with limited information.
“The primary challenge is not a technical challenge,” Grogan says. “It’s more of a social challenge. How do you balance individual benefits versus public benefits? And how do you act under the uncertainty of not knowing what others are going to do as well?”
Decentralized infrastructure can be both a gift and an issue. In the right place, distributed solar can reduce pressure on an overloaded feeder. Batteries can help manage peak demand. Onsite water treatment and reuse can reduce strain on potable water and wastewater systems, especially in fast-growing neighborhoods where expanding pipe capacity would be expensive.
The hidden cost of opting out
The trouble begins when a good decision for one household becomes a problem for everyone else.
Garcia and Grogan will build models that connect two systems often studied separately — the physical networks that move water and power, and the strategic networks created by human choice. One layer will represent pipes, wires, substations, treatment systems, demand patterns and capacity limits. Another will represent households, developers and utilities making decisions about solar, batteries, onsite reuse, rates and incentives.
That is where game theory comes in. In everyday terms, game theory is a way to study situations where one person’s best move depends on what everyone else might do. Here, it gives the researchers a way to analyze decentralized infrastructure.
The team will compare different futures. In one, decentralized technologies are adopted where they provide the greatest benefit to the whole system, such as reducing strain on a crowded electric feeder or avoiding a costly water-system expansion. In another, adoption follows private incentives: who can afford the technology, who gets the fastest payback and who has the most to gain by reducing reliance on the shared system.
Those two maps may not match. A wealthy neighborhood may see rapid solar adoption because residents can afford the up-front cost, while another area may see little adoption even if distributed generation would be more useful there. Onsite water reuse may offer similar benefits, but only if it appears in places where the larger network needs relief.
If people with the most resources reduce what they buy from public utilities, they may also reduce what they pay into systems that still have fixed costs. The grid still has to provide backup power. The debt used to build the system still must be repaid.
“Once you’ve built the pipes, you still have to maintain the pipes,” Garcia says. “That cost doesn’t go away just because a certain percentage of home or business owners exited the system.”
Redesigning the rules
The point of the project is to find ways to avoid that kind of mismatch. Garcia and Grogan will test how different rates, rules and incentives change the game. A utility might encourage solar-plus-storage adoption in locations where it reduces grid strain, while designing rates that keep adopters contributing fairly to fixed costs. A water provider might support onsite reuse in neighborhoods where increased population would otherwise require major pipe expansions. In some cases, better information may help. In others, utilities may need to change what they charge for, what they discount and what they reward.
The researchers do not expect one answer to work everywhere. Phoenix’s power challenges are different from Seattle’s. New York’s water constraints are different from Arizona’s. The project aims instead to identify design principles that can guide utilities, planners and regulators as centralized systems become more hybrid.
The broader question extends beyond water and energy. Similar tensions appear in transportation, education and other systems where private options interact with the public good. When some people can buy their way into alternatives, the public system does not simply disappear. It often becomes more fragile for those who remain.
The grid, in this view, is not just being disrupted. It is being renegotiated. Civil engineering can show where the pressure points are. Game theory can show why people may not act in ways that protect the whole system. The hard part is designing rules for a world where private choices increasingly flow through public pipes and wires.
