Recent scholarship has unsettled notions of governance as bound by territorial-scalar logics and argued for a more relational approach that emphasises the spatiality of flows across borders (ALLEN and COCHRANE, 2007, 2010; ALLEN et al., 1998; AMIN, 2004; AMIN et al., 2003; MASSEY, 2007). In response there has been a call to retain a territorially-oriented interpretation of political economy but to supplement this with a non-territorial, relational approach (HUDSON, 2007; MACLEOD and JONES, 2007; MORGAN, 2007). Jessop et al have cautioned against privileging any single dimension of socio-spatial organisation emphasising the inherently polymorphic, multidimensional character of sociospatial relations (JESSOP et al 2008). 

This paper explores the question to what degree have the more ‘relational and unbounded’ forms of governance replaced inherited forms of ‘territorially embedded’ state spatial organization? It does this by examining the changes in policies and utility practices on electricity demand management in Victoria in the 1990s.

The paper finds that political space is both “bounded and porous” (MORGAN 2007) and that emergent modes of relational connectivity are still constrained by territorial, administrative and scalar dimensions of socio-spatiality. State (regional) boundaries became increasingly porous during this period with the creation of a transregional grid and wholesale market, and the entry of foreign capital interests.  Despite this, territorial administrative boundaries for the governance of electricity provision and consumption were reasserted. Attempts at rescaling governance of electricity from a State (regional) to a national level proved difficult because of the lack of jurisdictional authority and the weakness of networks of political power necessary to assert authority in the face of well established scales of governance. Territorial politics continued to dominate the marketisation process via networks of political parties, advocacy groups and strategically-located constituents.

Despite the creation of a new discourse of competition and consumer sovereignty that heralded a major rescaling in relations of provision and consumption, the material landscape of electricity production and distribution specific to Victoria limited the scope for real innovation on demand management.  New flows of capital and information were important factors in reestablishing territorial embeddedness as corporate actors sought out “safe spaces” for accumulation (i.e. supply side rather than demand side solutions). 

Only a multidimensional approach that refuses to privilege scale, network or territory is capable of explaining the complexity of scalar restructuring. A networks/relational focus can be used to explained how pre-existing territorial-administrative scales can be consolidated through the formation of new material and political relations.