A system and method for allowing islanding in an underground power distribution network when power is lost to the network. The network includes transformers having source side and load side switching devices and servicing a transformer section. The method includes detecting loss of voltage to the network, opening the source side and the load side switching devices in all of the transformers and allowing distributed power generation sources in the sections serviced by the transformers to provide power to the section. The method also includes closing one or both of the source side switching device and the load side switching device of a transformer that services a section that has power generation sources providing excess power, and closing a source side switching device or a load side switching device in an adjacent transformer to the transformer section providing excess power to provide power to the adjacent section.