Background: This article entails an innovative approach to smart grid technology implementation, as it connects governance research with legal analysis. We apply the empirico-legal ‘ILTIAD framework’, which combines Elinor Ostrom’s Institutional Analysis and Development (IAD) framework with institutional legal theory (ILT), to an empirical case study of a local smart grid project. Methods: Empirical data were collected in an exploratory, descriptive example study of a single case, focusing on the Action Situation and interactions towards establishing a local Smart Grid. The case was chosen because of its complexity, following the ‘logic of intensity sampling’. Data triangulation took place combining participatory observation, semi-structured interviews, and document analysis. Results: Through an exploratory case study, we showed how the ILTIAD framework can help reduce complexity in local decision-making processes on smart grid implementation, as it allows for analytical description and prescriptive design of local smart grid systems. In the analysis we addressed ownership arrangements and contracts and identified barriers and opportunities for realizing a local smart grid system. The design part includes a scenario which revealed the prescribed patterns of behaviour (liberties and abilities) and the consequential aspects that apply to each situation. Conclusions: Analysing and designing normative alignment ex ante to the planning and implementation of a smart grid system provides clarity to stakeholders about their current opportunities. For this reason, the ILTIAD framework can be used as a design guideline for establishing new and integrated smart grid projects.