This term usually refers to a process of splitting an electric utility into subsidiaries, so that the same company isn't involved in producing energy and delivering it to customers. Structural separation is often required by law in newly-deregulated markets to protect consumers and emerging competitive utilities against monopoly abuses and to encourage stronger competition.

Less commonly, it refers to a requirement made of electric utilities that they restructure themselves to separate their transmission or distribution services from other services they may provide. This form of structural separation is done to prevent utility companies from monopolizing energy provision services in a particular area.

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