Elinor Ostrum gave eight principles for the design of a commons. Follow the principles, and a community can avoid the Tragedy of Commons and become an Opportunity of the Commons. The principles described in her book "Governing the Commons: the evolution of institutions for collective action" are:
- Clearly defined boundaries;
- Proportional equivalence between benefits and costs;
- Collective choice arrangements;
- Graduated sanctions;
- Fast and fair conflict resolution;
- Local autonomy;
- Appropriate relations with other tiers of rule-making authority (polycentric governance).
The principles hold for Pre Power Co-ops
Clearly defined boundaries
Pre Power Co-ops are concerned with generating, supplying, and paying for clean energy. The Co-op members do not need to know anything else about other members, and no further interactions or transactions are part of the Co-op's operation.
Proportional equivalence between benefits and costs
Measuring benefits and costs with Pre Power Co-ops is transparent and easily calculated. The benefits are lower-cost clean energy than dirty energy and higher annuity returns on investments than commercial annuities. The electricity consumers get lower-cost electricity, and investors get further lower-costs the longer they invest. Each Co-op can set the balance as it sees fit.
Collective choice arrangements
The governance structure, limited size, and method of choosing Co-op executives and board members mean the governance and rules of the Co-ops are collective actions. The ability of individuals to move between Co-ops without penalty or without gaining extra benefits allow individuals choice with whom they cooperate.
The IT systems report, in real-time, the financial state of the Co-op and an individual's position privately to the individual. The software alerts members when there is an economic danger to the Co-op operation and implements or suggests actions.
Individuals can fail to pay invoices. When this happens, the Co-op has the consent from the member to use any pre-payments to pay invoices. If no pre-payments are available, the Co-op will pay the invoices with negative pre-payments that incur a proportionate penalty. If the negative pre-payments become excessive, the Co-op can evolve procedures to cope. The final sanction is to exclude the member from the Co-op and stop the delivery of Co-op power to the offending person.
Fast and fair conflict resolution
Electronic consensus resolves most conflicts. When required, secret electronic voting resolves deadlocks.
Each household is in control of its consumption. The Internet and the limited number of members mean all Co-ops are local as all members have, at most, two degrees of separation.
Appropriate relations with other tiers of rule-making authority (polycentric governance)
The Pre Power Co-op of Co-ops only concerns itself with issues involving multiple Co-ops. Examples are lobbying for government regulation changes, insurance, and negotiating prices with large suppliers of services.