Unbundling

The process of separating a service into component parts (generation, transmission, distribution, ancillary services, etc) to allow customers to choose where to buy each service separately. Utility unbundling, overseen by regulators, generally requires utilities to ensure that the price of each service accurately reflects the cost of that service (plus a margin for profit). In this way, unbundling helps ensure that customers pay for what they receive and are not forced to subsidize services they do not use.