The relaxation, reduction or complete removal of legislated restrictions from an industry or industry sector whose activities were previously under strict government supervision.

Deregulation takes many forms. In practice it can mean anything from the relaxation of a single regulation to complete removal of all regulations. In the energy industry, it typically refers to restructuring legislation to de-monopolize the industry and create an environment for competitive business practices. Deregulation doesn't necessarily mean a net reduction in regulation. When some deregulated industries, participants in that industry may find themselves freer to compete in the marketplace but subject to a greater number of legal conditions than they were under regulation.

Throughout most of the 20th century, energy services in North America were operated under monopoly or natural-monopoly conditions in which a single vertically integrated company provided a given area with everything from energy generation to meter reading and billing. At this time, the industry is shifting to a competitive business environment, and part of deregulation involves the establishment and encouragement of separate competitive markets for all of the individual services required to produce and deliver energy.

Deregulation differs from restructuring in that deregulation is done by regulators, and restructuring is what businesses do in response to deregulation.

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