Prior to deregulation of the US energy industry, most energy customers were provided with electrical service as an integrated package. Energy customers in Canada still receive service in this fashion. As more competition emerges in the energy industry and more companies become involved in the production and delivery of energy, separate charges for each facet of electrical supply and service is billed as a distinct line item charge on a customer's invoice. Customers no longer pay for a group of services represented as a single service. Instead they pay for a multitude of services (energy generation, transmission, distribution, and perhaps many more depending on how energy is billed in a given region), all of which are required for electrical service. When services are charged in this way they are referred to as unbundled.

Unbundling of services opens up each of these distinct services to competition, and in theory should result in reduced prices for better service, but this comes at the expense of increased complexity of billing and greater demands on consumers seeking the best deals.

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