Refers to the process of transporting energy from transmission systems to end-use customers. Transmission systems are somewhat like the interstate highway systems of the energy industry, conducting large amounts of energy along high-volume routes that intersect at strategic locations. Distribution systems are the off-ramps, feeder routes and sideroads. They carry electricity from high-voltage transmission networks to end-use customers.

In some contexts, distribution is considered to be any transmission of energy on lines carrying less than 69,000 volts.

Prior to deregulation, distribution was typically provided as part of a full package of services ranging from generation through to billing. Distribution is considered a separate service under deregulation, and distinct distribution companies, referred to as DISCOs, will eventually emerge as a competitive sector of this industry. Distribution companies will maintain everything from the feeders that tap high-voltage lines to substation transformers that convert this voltage to commercial or household voltage to the service drops that carry energy from power lines to residences and commercial sites.

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